Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02: 18 Desc Main

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‘Tho cost ol your oredit en @ yearly rate, 7 ‘The dollar amount the oredR will cost you. *

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(© R014 Navy Federal NPCU 281 (0-14) NOTICE: Gee olher elds for additional disclosures and Geourtty Agreement


Case 16-00703-SCS_ Doc2_ Filed.09/27/16 Entered 09/27/16 15:02:18 Desc Main
CasstGG04BBGC6ES DOWER ol weH Ly DSi 18 264 2173:OBesdésain
Exhibit(s) Transporting aitb@sonage A\ zat greement Page 2 of 3

HOURS OF OPERATION AND RETRIEVAL OF VEHICLE(S). Upon payment in full of any fees due hereunder and
the execution of a full release, this Agreement may be terminated and the Vehicle(s) may be retrieved from storage
by Owner, Retrieval of the Vehicle(s) must be by prior appointment only at any time during Sperro's regular business
hours which are between 10:00 a.m. and 4:00 p.m. daily, Tuesday thru Thursday. The Vehicle(s) must be retrieved
from Sperro's facility located at 2534 Bluff Road, Indianapolis, Indiana 46225. Except as specifically set forth herein,
no person other than Owner or his/herfits properly designated agent shall be authorized to retrieve the Vehicle from
storage. Proper photo identification will be required of any person(s) retrieving the Vehicle(s) on behalf of Owner.

NO HARMFUL MATERIALS. Owner understands, acknowledges and agrees that no hazardous or noxious
materials may be stored in the Vehicle(s) while at the Facilities.

SEVERABLE. |f any part of the Agreement Is declared invalid, it shall not affect the validity of any remaining
portions, which portions shall remain in full force and effect.

ASSIGNMENT, Sperro may assign any or all of its rights, interests, and obligations hereunder without the necessity
of obtaining Owner's consent.

CONFIDENTIAL. This Agreement and its terms are to remain strictly confidential. Disclosure of this Agreement or
its terms is prohibited without the express written permission of the non-disclosing party. Any disclosure in violation
of this provision shall be deemed a material breach of this Agreement.

LIMITATION OF LIABILITY. Sperro assumes no liability for loss, damage, or destruction, of any kind to the
Vehicle(s), except any damage directly attributable to the gross negligence of Sperro. Further, Sperro assumes no
liability for damage due to the faulty mechanical condition of the Vehicle(s) or any negligence due to the Owner, or for
the loss of any personal items left in the Vehicle(s), or for the loss of use of the Vehicle while in Sperro's possession.

CHOICE OF LAW/JURISDICTION/VENUE. This Agreement shall be governed by and construed In accordance with
the laws of the State of Indiana. The parties hereto irrevocably submit to the exclusive jurisdiction of the state courts
of Marion County, Indiana, for the purposes of any suit, action, or other proceeding arising out of this Agreement and
agree not to commence any such suit, action, or other proceeding except in such court. Moreover, the parties
imevocably and unconditionally waive any objection to the laying of venue in any such suit, actlon, or other
proceeding in the state courts of Marion County, Indiana.

GENERAL. This Agreement constitutes the entire agreement among the parties and supersedes all prior
agreements or understandings among the parties with respect thereto. Descriptive headings are for convenience
only and shall not control or affect the meaning or construction of any provision of this Agreement. This Agreement is
valid only when signed by both parties. All of the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns. Owner agrees to indemnify,
hold harmless and defend Sperro from all claims, demands, actions or causes of actions, including attorney fees, and
all costs that might result from Owner entering into this Agreement with Sperro, Sperro is not responsible for any
loanfien payments that may be due on the Vehicle(s) and strongly recommends that Owner keep any loan/lien
payments current,

BY SIGNING THIS AGREEMENT, OWNER ACKNOWLEDGES HAVING READ AND AGREED TO EACH AND.
EVERY TERM AND CONDITION OF THIS AGREEMENT.

Sperro LLC OWNER ch
By: By;, p=

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Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main

Case 16-70486-SCS Doc 32ecumeat07/Page 3Enfe%éd 07/22/16 16:22:46 Desc
Notice of Motion Page 2 of 2

(2) Attend a hearing to be scheduled at a later date. You will receive separate notice of the
hearing. If no timely response has been filed opposing the relief requested, the court
may grant the relief without holding a hearing.

Under Local Bankruptcy Rule 9013-1, unless a written response to this motion

and supporting memorandum are filed with the Clerk of Court and served on the
moving party within 7 days before the scheduled hearing date, the Court may deem
any opposition waived, treat the motion as conceded, and issue an order granting the
requested relief without further notice or hearing.

If you or your attorney do not take these steps, the court may decide that you do not

oppose the relief sought in the motion and may enter an order granting that relief.

Date: July 22, 2016 Attorney: /s/Kenneth N. Whitehurst, III
Kenneth N. Whitehurst, III

CERTIFICATE OF SERVICE

I certify that on the 22nd day of July 2016, service on all attorney Users in this case was
accomplished through the Notice of Electronic Filing, pursuant to CM/ECF Policy 9 of the
United States Bankruptcy Court for the Eastern District of Virginia, Case Management
Electronic Case Files (CM/ECF) Policy Statement, Version 09/04/09.

/s/ Kenneth N. Whitehurst, IIT



Case 16-00703-SCS Doc2 Filed 09/27/16 Entered poles 10218 pese,Main
Cas = ~ Doc 44 Doéélenh @9112/Rag& O@1efc929/12/16 12:08:11 esc Main
SAE PEB RES. Document Page 29 of 29 September 8, 2016

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Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
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Document Page 4 of 11

$250.00. On the four corners of the TSSA, there is no monetary consideration provided by Sperro,
LLC for its right to take possession of the Vehicle. (A copy of the TSSA is attached and
incorporated herein as Exhibit 3).

ANSWER: Denied.

14. The TSSA further provides “All transportation-related fees and the first ten (10) days
of storage fees (the “Initial Fees”) are due and payable on the tenth ( 10") day following Sperro’s
possession of the Vehicle... Failure to pay the Initial Fees by the fifteenth (1 5") day following
Sperro’s possession of the Vehicle shall result in the Owner being declared in default of this
Agreement and shall subject the Vehicle to mechanic’s lien foreclosure proceedings... pursual to
Indiana Civil Code... Owner understands that if any fees due hereunder are not paid when due,
Sperro is granted an express security interest in the Vehicle in addition to the statutory mechanic’s
lien afforded to Sperro under Indiana law.” See Exhibit 3.

ANSWER: Document speaks for itself.

15, On Official Form 107, “Statement of Financial Affairs for Individuals Filing for

Bankruptcy” signed under penalty of perjury by the Debtor, under Part 7, in answer to question 16:
“Within | year before you filed for bankruptcy, did you or anyone else acting on your behalf paty
or transfer any property to anyone you consulted about seeking bankruptcy or preparing a
bankruptcy petition,” the Debtor responded: “Hampton Roads Legal Services received $1835.00
from Sperro, LLC in December 2015.” Further, in the Petition’s Disclosure of Compensation of
Attorney for the Debtor, Debtor's counsel acknowledges the receipt of $1,835.00 from Sperro,
LLC.

ANSWER: Document speaks for itself.

16. On Official Form 107, “Statement of Financial Affairs for Individuals Filing for
Bankruptcy” signed under penalty of perjury by the Debtor, under Part 7, in answer to question 18:
“Within 2 years before you filed for bankruptcy, did you sell, trade, or otherwise transfer any

property to anyone. other than property transferred in the ordinary course of your business or
financial affairs.” the Debtor's schedule reflects the 2015 Toyota Tacoma was transferred to
Sperro, and specifically states that “Sperro paid $1,835 directly to Hampton Roads Legal Services

Edrie A. Pleiffer 41791
Hampton Roads Legal Services
372 S. Independence Blyd,
Suite 109

Virginia Beach, VA 23452
(757) 340-3100


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Document Page 6 of 9

destroyed, mutilated or concealed, or has permitted to be transferred, removed, destroyed,
mutilated or concealed, property of the Debtor (namely the 2015 Toyota Tacoma,) within
one year before the date of the filing on the petition.

22. The Debtor’s intent to hinder, delay and defraud NFCU can be inferred
from the Debtor’s actions and from the facts and circumstances surrounding his willful
and voluntary transfer of NFCU’s collateral to Sperro, LLC. At the time the Debtor
entered into the TSSA with Sperro, LLC, the Debtor had no legitimate need for the
transportation and storage services of Sperro, LLC, but rather, entered into the TSSA for
the sole purpose of having Sperro, LLC pay for the Debtor’s legal fees and costs
associated with filing of the instant Chapter 7 Petition. The Debtor’s voluntary
transfer of possession of NFCU’s collateral pursuant to the TSSA was done with
no intention of paying any of the fees and costs agreed to by him in the TSSA, and with
no intention of recovering the Vehicle. The Debtor’s intentional transfer of
possession of NFCU’s collateral pursuant to the TSSA was done with reckless
disregard of the injury he would cause to NFCU by surrendering possession of
NFCU’s collateral. Likewise, the Debtor’s willful transfer of possession of NFCU’s
collateral pursuant to the TSSA was done with reckless disregard to the
warranties and promises he made to NFCU in the Note, Agreement and
Disclosure. Namely, the Debtor willfully and intentionally entered into and signed the
TSSA, and willfully gave possession of NFCU’s collateral to Sperro, LLC, in violation of
his promises “to defend the collateral against claims and demands of other
persons,” and “to not knowingly permit any other liens to the attached collateral
or permit any action to impair its present value.” See Exhibit 1. Moreover, the
Debtor willfully and intentionally entered into and signed the TSSA, and willfully gave
possession of NFCU’s collateral to Sperro, LLC, in violation of his promise to “obtain
written consent of Navy Federal prior to disposing of collateral.” See Exhibit 1.
The Debtor’s actions were willful and done with intent to hinder, delay or

6


Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
Case 16-70486-SCS Doc 44 Dewemeor12/1ageme1@it900/12/16 12:08:10 Desc Main

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Colloquy 11

MS. KEZMAN: Can I say something, Your Honor, on
behalf of --

THE COURT: You may.

MS. KEZMAN: -- Navy Federal? The biggest problem in
this situation with respect to Navy Federal is there was no
notice. And she keeps saying that the -- or debtor's counsel
keeps alluding to the fact that the debtor was -- that Sperro
picked up the vehicle to put it in a safe location. And the
normal practice is, if the debtor doesn't want the car, you
call up Navy Federal and Navy Federal will come pick up the
vehicle. That's what should have happened. This vehicle was
way oversecured, so there was never going to be any money to
pay debtor's counsel.

So I can't speak to what Sperro's practices were years
ago, but in this particular situation, Navy Federal would not
have agreed to such a situation, because that's not their
normal practice. And for her to say that that was acceptable
to them, you're in a little bit of a different situation. This
did happen to Navy Federal in several cases in different areas,
but you're almost held hostage once they have your vehicle.

So to say that Navy Federal agreed is not really an
accurate statement. This particular car we got lucky, I hate
to say it, because it got caught up in a grand jury subpoena
and it was preserved with Indiana State Police. Had that not

happened, that car would have been sold, and we wouldn't have

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Document Page 3 of 6

10. Atno time did the Debtor or Debtor’s counsel contact NFCU and
notify the lienholder that the Debtor no longer wanted possession of their collateral
and request that they pick up the Vehicle.

11. Further, Sperro, LLC never contacted NFCU to notify them that Sperro,
LLC had possession of their collateral, and in fact, NFCU did not learn that the collateral
had been transferred to Sperro, LLC until the Chapter 7 Trustee informed them after the
341 meeting in March 2016. At the 341 meeting, the Chapter 7 Trustee abandoned the
estate’s interest in the collateral.

12. Upon learning this information, NFCU filed the instant complaint objecting
to the Debtor’s Discharge on the basis that the Debtor’s actions of transferring the 2015
Toyota Tacoma to Sperro, LLC hindered and delayed NFCU in obtaining possession of
their collateral.

13. In response to the complaint, the Debtor filed an Answer with an
affirmative defense stating that he relied on the advice of counsel to make the transfer of
the 2015 Toyota Tacoma to Sperro, LLC so that Sperro, LLC would pay for his legal fees
and costs associated with the instant bankruptcy filing.

14. After months of searching for its collateral, Plaintiff's counsel was able to
locate the collateral in the possession of the Indiana State Police. Plaintiff’s counsel
negotiated the release of NFCU’s collateral for towing storage fees of $1,660.00 to Hix
Towing in Indianapolis, Indiana. The Vehicle was picked up on July 11, 2016 from the
Indiana State Police, where it had held after it had been seized from Sperro, LLC’s lot on
March 1, 2016 as part of a grand jury forfeiture subpoena against Sperro, LLC.

15. — Inaddition to the storage and towing expense that would have to be paid to
Hix Towing, Navy Federal Credit has expended considerable resources in legal fees and

costs in pursuing the complaint and in locating and negotiating the release of their


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Document Page 1 of 6

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF VIRGINIA
NORFOLK DIVISION Attachment D

In re:

BRETT BUD HALL Chapter 7

Debtor. Case No. 16-70486-SCS

NAVY FEDERAL CREDIT UNION,

Plaintiff, APN: 16-07024

BRETT BUD HALL

Defendant.

CONSENT ORDER IN SETTLEMENT OF NFCU’S COMPLAINT
OBJECTING TO THE DEBTOR’S DISCHARGE AND DISCHARGE-

ABILITY OF THE DEBT

This matter comes before the Court on the Complaint Objecting to the Debtor’s
Discharge and the Discharge-ability of Debt surrounding the circumstances based the
Debtor’s transfer of a 2015 Toyota Tacoma (“Vehicle”) to Sperro, LLC, a towing company

located in Indianapolis, Indiana.

Anastasia Kezman, Esq.

VSB#33325

Deborah Kirkpatrick, P.C.

Post Office Box 10275

Virginia Beach, VA 23450-0275

Ph: (757) 343-3869; Fax: (757) 233-0275
Anastasiak 1Q@cox.net

Counsel for Navy Federal Credit Union



——- - Case 16-00703-SCS—-Doc-2  Filed-09/27/L6-~Entered 09/27/16 15:02:18 Desc Main |

Case 16-70486-SCS Doc 42 D@ tenn eot08/agE Ae @id800/08/16 15:55:28 Desc Main
Document Page 1of4

UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF VIRGINIA Attachment E
NORFOLK DIVISION
In re: Case No. 16-70486-SCS
Brett Bud Halt Chapter 7
Debtor.
CONSENT ORDER

This matter came before the Court upon the agreement of movant Judy A. Robbins,
United States Trustee for Region Four, and respondents Edrie A. Pfeiffer, Esq. and Garfinkel and
Pfeiffer, P.C., dba Hampton Roads Legal Services (“HRLS”) in connection with the United
States Trustee’s Motion to Examine the Debtor’s Transactions with his Attorney (“Motion”)
filed July 22, 2016. (Docket Entry 32). It appearing to the Court that:

A. Ms. Pfieffer is a partner with the HRLS firm.

B. Ms. Pfeiffer is counsel to the debtor.

Cc. Prior to filing his bankruptcy petition, the debtor owned three vehicles, including
a 2015 Toyota Tacoma (the “Vehicle”).

D. The Vehicle was collateral for a debt owed to Navy Federal Credit Union.
(“NFCU”).

E. The value of the Vehicle on the petition date was significantly less than the
amount owed by the debtor to NFCU.

F. Prior to filing this case, the debtor sought advice from Ms. Pfeiffer about the

Vehicle and the debt to NFCU for which it served as collateral.

Kenneth N. Whitehurst, IM, Esq., AUST, VSB No. 48919

Cecelia A. Weschler, Esq., VSB No. 28245

Nicholas S, Herron, Esq., NJSB No. 03007-2008, PASB No. 208988
Office of the United States Trustee

200 Granby Street, Room 625

Norfolk, VA 23510

(757) 441-6012


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Document Page 1 of 29

IN THE UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF VIRGINIA (NORFOLK)
Attachment F

Case No. 16-70486-scs
Norfolk, Virginia

In Re:

BRETT BUD HALL,

Debtor.

September 8, 2016
11:03 A.M.

TRANSCRIPT OF HEARING ON
{37] MOTION FOR APPROVAL OF SETTLEMENT OF NFCU'S COMPLAINT
OBJECTING TO THE DEBTOR'S DISCHARGE AND TO THE DISCHARGEABILITY
OF NFCU'S DEBT ON BEHALF OF NAVY FEDERAL CREDIT UNION.
[32] U.S. TRUSTEE'S MOTION TO EXAMINE UNDER U.S.C. SECTION 329
AND MOTION TO DISGORGE.

BEFORE THE HONORABLE STEPHEN C. ST. JOHN
CHIEF UNITED STATES BANKRUPTCY COURT

APPEARANCES:

For the Debtor: EDRIE A. PFEIFFER, ESQ.
HAMPTON ROADS LEGAL SERVICES
372 South Independence Boulevard
Suite 109
Virginia Beach, VA 23452

United States Department KENNETH N. WHITEHURST, III, AUST
of Justice: OFFICE OF THE UNITED STATES
TRUSTEE
200 Granby Street
Suite 625
Norfolk, VA 23510

For Navy Federal Credit ANASTASIA P. KEZMAN, ESQ.

Union: DEBORAH KIRKPATRICK, P.C.
Post Office Box 10275
Virginia Beach, VA 23450

Transcription Services: eScribers, LLC
700 West 192nd Street
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PROCEEDINGS RECORDED BY ELECTRONIC SOUND RECORDING.

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Document Page 10 of 11

Court lacks jurisdiction regarding that theory of recovery.
6. Plaintiff's claims are barred in whole or in part by its failure to mitigate the damages.
7. Plaintiff's claims are barred in whole or in part because no fiduciary relationship
sufficient to satisfy 28 U.S.C. 523(a)(4) existed between the parties.
8. Defendant lacks the requisite actual intent to defraud.
9. Defendant relied upon the advice of counsel.
10. Defendant has a good faith justification for the TSAA.

11. Defendant reserves the right to raise other defenses as discovery progresses.

Edfié A. Pfeiffer, VSB#4179]
Counsel for Debtors

CERTIFICATE OF MAILING

Edrie A. Pfeiffer 41791
Hampton Roads Legal Services
372 S. independence Blyd.
Suite 109

Virginia Beach, VA 23452
(757) 340-3100


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Case 16-07024-SCS Doc Dacumeatos/1Bage 2hosrO2 05/12/16 14:13:08 Desc
Exhibit(s) Transporting and Storage Authorization Agreement Page 2 of 3

HOURS OF OPERATION AND RETRIEVAL OF VEHICLE(S). Upon payment in full of any fees due hereunder and
the execution of a full release, this Agreement may be terminated and the Vehicle(s) may be retrieved from storage
by Owner. Retrieval of the Vehicle(s) must be by prior appointment only at any time during Sperro’s regular business
hours which are between 10:00 a.m. and 4:00 p.m. daily, Tuesday thru Thursday. The Vehicle(s) must be reirieved
from Sperro's facility located at 2534 Blutf Road, Indianapolis, Indiana 46225. Except as specifically set forth herein,
no person other than Owner or hisMer/its properly designated agent shall be authorized to retrieve the Vehicle from
storage. Proper photo identification will be required of any person(s) retrieving the Vehicle(s) on behalf of Owner.

NO HARMFUL MATERIALS. Owner understands, acknowledges and agrees that no hazardous or noxious
materials may be stored in the Vehicle(s) while at the Facilities.

SEVERABLE. If any part of the Agreement Is declared invalid, it shall not affect the validity of any remaining
portions, which portions shall remain in full force and effect.

ASSIGNMENT. Sperro may assign any or all of its rights, interests, and obligations hereunder without the necessity
of obtaining Owner's consent.

CONFIDENTIAL, This Agreement and its terms are to remain strictly confidential. Disclosure of this Agreement or
its terms is prohibited without the express written permission of the non-disclosing party. Any disclosure in violation
of this provision shall be deemed a material breach of this Agreement.

LIMITATION OF LIABILITY. Sperro assumes no liability for loss, damage, or destruction, of any kind to the
Vehicle(s), except any damage directly attributable to the gross negligence of Sperro. Further, Sperro assumes no
liability for damage due to the faulty mechanical condition of the Vehicle(s) or any negligence due to the Owner, or for
the loss of any personal items left in the Vehicle(s), or for the loss of use of the Vehicle while in Sperro's possession.

CHOICE OF LAW/JURISDICTION/VENUE. This Agreement shall be govemed by and construed in accordance with
the faws of the Slate of Indiana. The parties hereto irrevocably submit to the exclusive jurisdiction of the state courts
of Marion County, Indiana, for the purposes of any suit, action, or other proceeding arising out of this Agreement and
agree not to commence any such suit, action, or other proceeding except in such court. Moreover, the parties
irrevocably and unconditionally waive any objection to the laying of venue in any such suit, action, or other
proceeding in the state courts of Marion County, Indiana.

GENERAL. This Agreement constitutes the entire agreement among the parties and supersedes all prior
agreements or understandings among the parties with respect thereto. Descriptive headings are for convenience
only and shall not control or affect the meaning or construction of any provision of this Agreement. This Agreement is
valid only when signed by both parties. All of the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns. Owner agrees to indemnify,
hold harmless and defend Sperro from all claims, demands, actions or causes of actions, including attorney fees, and
all costs that might result from Owner entering into this Agreement with Sperro. Sperro is not responsible for any
loanfien payments that may be due on the Vehicle(s) and strongly recommends that Owner keep any loanilien
payments current.

BY SIGNING THIS AGREEMENT, OWNER ACKNOWLEDGES HAVING READ AND AGREED TO EACH AND
EVERY TERM AND CONDITION OF THIS AGREEMENT.

Sperro LLC OWNER

By: By: 2 =
Print Print Bretk  ® We dl
Title, Title.

1D CODE oa lFey “297-0

2 of 2



Case 16-00703-SCS_ Doc2_ Filed_09/27/16 Entered 09/2 102: i
Case 16-70486-SCS Doc ug O8 Fas “Pore BABI Stes BSE Man
Exhibit(s) Transporting al MEYEA iz. tfeement Page 3 of 3

EXHIBIT C

ODOMETER DISCLOSURE STATEMENT
State Form 43230 (R3/ 5-13)
INDIANA BUREAU OF MOTOR VEHICLES

yd In accordance with federal and state lew, the seller of a motor vehicle must disciose the current milsege lo 8 purchaser in
writing upon transfer of ownership. The disclosure must be signed by the seller, including the printed name. if more than one
parson |g @ seller, only one seller is required to sign the written disclosure.

The purchaser must sign the disclosure stalement, Including printed name and address, and retum # copy to the seller.
Complate this form in its entirety, In blue or black ink,

en

Federal and State taw requires that you state the mileage upon transfer of ownership. Failure to complete or providing a false
statement may result in fines, imprisonment, or both.

Byes ® Wedd : residing at:
Peintod numo(s) of Setior(s) .

Seq JEANNE ST Vivgierie BEM, VA_Z23°GS cortity to the best of my knowledge that the
‘Addreae of Sellars) (number 8nd stréal, chy, state, and ZIP code)

odometer reading Is the actual mileage of the vehicle described below unless one of the following statements is checked:

‘Miles (no tenths) od 1. | hereby certify that to the best of my knowedge the odometer reading reflects the amount of
va mileage in excess of its machanical limits. .
7 4 ol ( 2. thereby certify that the odometer reading is NOT thé actual mileage and should not be relied upon.
WARNING - ODOMETER DISCREPANCY.

Vania Make Vahicla Mase Vonide Year Voriaia Body Type
Toor THEOM cn ZS ree

‘Veni idonification Number (VIN) ‘Transfer Date (month, day, your)
S[tleljeloly lela {slelx|t [3 [3] ei 2] el oc wv, 2e1s7

{ will not hold the Bureau of Motor Vehicles or the Bureau of Motor Vehicles Commission responsible for any diecrepancy shown on
the odometer reading. |, the undersigned, swear or affirm that the information entered on this form Is correct. | understand that
making a false epee may Sear taal the crime of peury.

De aN Dee A tei

PURCHASER’S INFORMATION

Jam aware of and acknowledge the above odometer certification made by tha saller(s).
Bipnaturele) of Purchasar(ay Date (month, day, you)

Printed Name(s) of Purchaser{e)

“Aasrees ol Purchewars) (number and sireap

iy Sate iP Coda



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Colloquy

long distances for it. But as was originally printed, it was
that they had like little hubs that they presented that they
stored the collateral at and then worked with the companies on
a national basis to liquidate the collateral for them, so
that -- I guess is what I understood it was that they kind of
acted as a voluntary repossession agent in working with the
companies.

Now, I understand that's not what happened. But that
was kind of what my understanding was, was that it was -- that
they worked with these national credit unions and companies --
other companies, finance companies, to take possession of the
vehicle in a voluntary manner, to move it to a secure location
until the vehicle could be either liquidated or turned over to
the creditor for it. dust the same as if an agent hired by the
credit union had gone out and taken possession of the vehicle.
But it gave the debtor the certainty of when this vehicle was
going to be taken and that it was going to be stored in a
secure location, and that the debtor didn't have to be worried
about something happening to the vehicle until the creditor
took possession.

That was my understanding of it, that it was not
anything that was to try and circumvent the creditor's rights
or anything along that line. And I would never participate in
something that I thought was going to try and screw a creditor

out of something other than voluntary repossession.

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Document Page 5 of 92

Sperro paid $1,835.00 to her law firm after Mr. Hall transferred possession of the Vehicle to Sperro
and that such “fees were obtained in exchange for Sperro, LLC[’s] acquisition of NFCU’s
collateral.” Id. J] 8-9, 16. Neither Mr. Hall, Ms. Pfeiffer, nor Sperro notified NFCU that possession
of the Vehicle had been transferred to Sperro. Id. {ff 10-11.

Ms, Pfeiffer made similar admissions in the Consent Order Granting the Motion to Examine
Debtor’s Transactions with His Attorney and for Disgorgement of Paid Fees Pursuant to 11 U.S.C.
§ 329, including that she “advised the debtor to transfer the Vehicle to [Sperro], which would sell
the vehicle, and use the proceeds to pay the debtor’s bankruptcy filing fees, and all fees due to
[Hampton Roads Legal Services] for Ms. Pfeiffer’s representation of the debtor in this bankruptcy
case.” Consent Order Granting the Motion to Examine Debtor’s Transactions with His Attorney and
for Disgorgement of Paid Fees Pursuant to 1 1 U.S.C. § 329, entered September 8, 2016, at ]G. Ms.
Pfeiffer further agreed that Mr. Hall, “on the advice of Ms. Pfeiffer, entered into an agreement to
transfer the Vehicle to Sperro” and “[a]s a result of the debtor’s transfer, [Hampton Roads Legal
Services] received $1,835 from Sperro.” Jd. {§ H-I. Finally, Ms. Pfeiffer “represents that she has
not advised any debtors other than the debtor in this case to transfer their vehicle to Sperro, LLC in
exchange for the payment of her fees.” Jd. § P.

Local Bankruptcy Rule 2090-11) incorporates by reference the ethical standards regarding
the practice of law as set forth in the Virginia Rules of Professional Conduct. Several of the rules
appear to be violated here as a result of Ms. Pfeiffer’s conduct. First, Rule 1.1 requires a lawyer to
exhibit competence: “A lawyer shall provide competent representation to a client. Competent
representation requires the legal knowledge, skill, thoroughness and preparation reasonably

necessary for the representation.” Va. R. Prof] Conduct 1.1. The rules also prohibit a lawyer from


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Document Page 13 of 29
Colloquy
against Sperro LLC as well as the Allen Chern Group (ph.) and
Upright Law in Roanoke, Virginia. Ms. Robinson's filed a suit
there, because this matter's come up in several cases there,
and has laid out all of the concerns that she has against that
entity in those proceedings.

And so in this proceeding, also, we know that the
Sperro towing company was raided by several federal agencies
and Indiana State Police, I believe, earlier this year. So we
know that this isn't going to be a problem at least with this
company -- I mean, maybe someone else will think of this crazy
idea. But as far as we know, this isn't going to keep
happening.

Ms. Pfeiffer has represented to me that this is the
only case in which she's advised someone to do this. We're not
aware of any other ones. I have no reason to doubt her about
that. And so the United States Trustee filed her motion, and
then when she learned that Navy Federal had reached the
resolution it had reached, agreed that that was a reasonable
result, given that Ms. Pfeiffer has come out-of-pocket far more
than she received in this case, or at least double what she
received in this case, and that all the United States Trustee
had requested in this case was disgorgement. And so that's
more than we had requested. And under the circumstances --

THE COURT: Well, but you did request disgorgement for

the benefit of the creditors and the estate. The fact that all

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o© ort A UB

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Document Page 12 of 29
Colloquy 12
had anything.

So in a sense, we were a little bit fortunate that
Sperro got caught. But I just wanted to make sure that the
Court was aware that Navy Federal would not agree to such a
situation. Their normal practice is to come pick -- they're
happy to come pick up a car in a situation like this.

THE COURT: I absolutely cannot even imagine how this
process, even as originally conceived, if it was different, has
any legitimacy. It seems like it is nothing more than
extortion to me.

MS. KEZMAN: I agree, Your Honor.

THE COURT: All right, Mr. Whitehurst, on your motion?

MR. WHITEHURST: Your Honor, Ken Whitehurst for the
United States Trustee, who completely agrees with the Court
about the conception of this scheme, I think is the right word
for it, frankly, Your Honor. There is no -- in the view of the
United States Trustee, there is no way this plan, even as
conceived, could have been lawful, because it contemplates
specifically taking a vehicle -- in this case worth about
20,000 dollars, subject to a lien worth about 40,000 dollars,
and then somehow mounting more fees on top of that, and yet
benefiting it to the tune of 3- or 4,000 dollars, back to
debtor's counsel.

The United States Trustee has filed a suit -- and of

course it hasn't been decided -- but it has filed a suit

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Colloquy 15

THE COURT: All right, sir.

MR. WHITEHURST: And I will add, Your Honor, of
course, if the Court's concerned, as I believe began this
hearing, with which -- with the statement that this is too
generous, the U.S. Trustee completely agrees with you and would
remind the Court, of course, that there are other -- there are
other remedies that, of course, aren't before the Court this
morning.

THE COURT: Well, are you going to pursue them?

MR. WHITEHURST: Well, Your Honor, some of those
remedies, I can't comment on. Some of those remedies involve a
recommendation to the State Bar that this matter be
investigated, and I've already started drafting that
recommendation, because I think the State Bar does need to take
a look at this, personally. I mean, I have that duty as an
attorney, much less as the Assistant United States Trustee.

And I've begun drafting that.

That's a shame, I think. But I do think that this
rises to that level of concern, because I can't understand, for
the life of me, how anyone would think that this is good
advice, and that the advice in this case led directly to the
debtor being the recipient of a 727 nondischargeability
complaint, which on its face is valid. Although we agree that
that matter -- because I believe the next question Your Honor

should ask --

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Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
Case 16-70486-SCS Doc 32 Dptemene2/1Bagera6reti 97/22/16 16:22:46 Desc Main
Document Page 10 of 10

WHEREFORE, the United States Trustee respectfully requests that this Court:

A. examine the debtor’s transactions regarding payment to his attorneys;

B. order that all legal fees paid to HRLS or Ms. Pfeiffer by the debtor, or on his
behalf, be returned, pursuant to 11 U.S.C. §329, to the debtor, or, in the alternative, to the chapter
7 estate;

Cc. cancel any fee agreement between the debtor or Sperro, and HRLS or Ms.
Pfeiffer; and

D. grant such other and further relief as the Court may find appropriate and just.

Respectfully submitted,

Judy A. Robbins
United States Trustee for Region Four

By /s/ Kenneth N. Whitehurst, III

Kenneth N. Whitehurst, ITI, Esq
Assistant U.S. Trustee

CERTIFICATE OF SERVICE

I certify that on the 22nd day of July 2016, service on all attorney Users in this case was
accomplished through the Notice of Electronic Filing, pursuant to CM/ECF Policy 9 of the
United States Bankruptcy Court for the Eastern District of Virginia, Case Management
Electronic Case Files (CM/ECF) Policy Statement, Version 09/04/09.

/s/ Kenneth N. Whitehurst, IT

10


Case 16- pele SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main

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Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main

Case 16-70486-SCS Doc 32 Defumeni22/1BagertéretW7/22/16 16:22:46 Desc Main
Document Page 2 of 10

5. The debtor, Brett Bud Hall, is an individual residing in Seffner, Florida. On the
petition date, Mr. Hall was a resident of Virginia Beach, Virginia, within the Eastern District of
Virginia.

6. Debtor’s counsel, Edrie Pfeiffer, is an attorney licensed to practice law in the
Commonwealth of Virginia and admitted to practice before bar of this Court.

7. Hampton Roads Legal Services is the fictitious name of Garfinkel and Pfeiffer,
P.C., a Virginia Professional Corporation. Ms. Pfeiffer has operated HRLS for many years as a
traditional local law firm.

8. In addition to her role with HRLS, Ms. Pfeiffer is also a “partner” with a business
called Upright Law, LLC (“Upright Law”). Upright Law is affiliated with Law Solutions
Chicago LLC (“LSC”). LSC is an Illinois company that has been domesticated in Virginia.
Upon information and belief, Kevin W. Chern is a member of Upright Law and LSC.

The “New Car Custody Program”

9. Through a June 18, 2015 email from Mr. Chern, Ms. Pfeiffer learned of a program
available to bankruptcy debtors known as the “New Car Custody Program.” A copy of the email
is filed herewith as Exhibit A.

10. In his email, Mr. Chern explains the program as follows:

Qualifications:

-Client wants to file for Chapter 7 bankruptcy.

-Client has a vehicle, motorcycle, boat, truck or other property that
client is willing to surrender.

-The property intended to be surrendered has no equity.

-The property to be surrendered is worth greater than $5000.
Program Details:

-Client contacts Sperro LLC (Sperro), a towing and storage
company, and arranges for Sperro to take custody of the debtor’s

property.


Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
Case 16-07024-SCS Doc Ddcufiledt05/1P4ge AiwfO2 05/12/16 14:13:08 Desc
Exhibit(s) Transporting and Storage Authorization Agreement Page 1 of 3

Transporting and Storage Authorization Agreement

This TRANSPORTING AND STORAGE AUTHORIZATION AGREEMENT (the “Agreement’) is entered into on the

tL day of DEC M29 1S”, by and between eety B el (‘Owner’) whose address is
SoOw JEANE ST, Wevgicnn Genel, Web 25447. and Spero LLC, an Indiana limited liability company
whose address is P.O. Box 163, Camby, Indiana 46113 (‘Sperro’). Ts 7- 309 ai) im) Sa

THE VEHICLE(S). Sperro agrees to take possession of, transport, and provide storage on a daily basis of the below-
described vehicle(s) in either of its secure outdoor storage facilities located at 2534 Bluff Road, Indianapolis, Indiana
46225 and 2334 South California Street, Indianapolis, Indiana 46225 (the “Facilities”). Owner represents and
warrants that he/she/il is anfthe owner of the below-described vehicle(s) (the “Vehicla(s)") and is authorized to
execute and enter into this Agreement.

year 21S make TICTTM poder THEM ving ST FU EN BFK 1.33820

PROOF OF OWNERSHIP AND PERMISSION. Upon execution of this Agreement, Owner shall provide Sperro
satisfactory proof of ownership of the Vehicle(s). Further, if any person other than the registered owner(s) of the
Vehicle(s) is authorizing the transport and/or storage of the Vehicle(s), Sperro shall be provided with satisfactory
proof of written permission from the registered owner(s) of the Vehicle(s) that such person is authorized to enter into
this Agreement. The form of such written permission shall be satisfactory to Sperro, at its sole discretion, and shall
include, but not be limited to, a notarized writing signed by the registered owner(s) of the Vehicle(s) along with
satisfactory proof of ownership.

AUTHORIZATION OF TRANSPORT. By entering into this Agreement, Sperro is authorized to transport the
Vehicle(s) from point of origin to the Facilities. Owner acknowledges, accepts and agrees that in addition to the
transportation fee of $1.85 per mile from the point of origin to the Facilities, there is a $75.00 load fee and a $75.00
unload fee per Vehicle as well as a one-time key charge fee of $175.00 and a one-time facility insurance fee of
$250.00. These transportation-related fees are nonnegotiable and subject to change by Sperro without prior notice.

AUTHORIZATION OF STORAGE. The Vehicle(s) will be stored outdoors, in a secured facility located at either 2534
Bluff Road, Indianapolis, Indiana 48225 or 2334 South Califomia Street, indianapolis, indiana 48225, on a day-to-day
basis. Owner acknowledges, accepts and agrees to the daily storage fee of $45.00 per day which will begin as of the
date that he/she/t enters into this Agreement and shall continue for so long as Sperro is in possession of the
Vehicle(s).

PAYMENT OF FEES. All transportation-related fees and the first ten (10) days of storage fees (the “Initial Fees") are
due and payable on the tenth (10") day following Sperro's possession of the Vehicle(s), without the necessity of
invoicing. Failure to pay the Initial Fees by the fifteenth (15") day following Sperro's possession of the Vehicle(s)
shall result in Owner being declared in default of this Agreement and shall subject the Vehicle(s) to mechanic's lien
foreclosure proceedings as discussed below. After payment of the Initial Fees, any additional storage fees shall be
immediately due upon invoicing by Sperro.

CONDITION OF VEHICLE(S). Sperro agrees to keep the Vehicle(s) in as good condition as it/they was/were in
when received from Owner and to deliver the Vehicle(s) to Owner at the termination of this Agreement in that same
condition (with the exception of any mileage added to the Vehicle(s) during transport), normal wear and tear
excepted. The purpose of this Agreement is only for the transportation and storage of the Vehicle(s). Owner may not
use the Facilities for any other purpose including, without limitation, the storage of anything other than the Vehicle(s)
and/or the maintenance or servicing of the Vehicle(s).

DEFAULT. Owner shall be in default of this Agreement if Owner fails to pay any fees arising hereunder when due or
defaults on any other term or condition of this Agreement. Default shall subject the Vehicla(s) to mechanic's llen sale
proceedings pursuant to the Indiana Civil Code. Such lien sale proceedings shall include the recovery of, bul not be
limited to, lien sale processing and collections charges not to exceed the maximum amount allowed by law, but in no
event less than $35.00 or more than $550.00 at the time lien sale notification documents are deposited in the U.S.
Mall. Owner understands that if any fees due hereunder are not paid when due, Sperro is granted an express
security interest in the Vehicle(s) in addition to the statutory mechanic's lien afforded to Spero under Indiana law. In
the event Owner defaults under this Agreement and/or abandons the Vehicle(s) at the Facilities, Sperro shall be
entitled to a $175.00 administrative fee. Should Sperro have to retain a third-party collection agent to recover any
sums due hereunder, Owner shall be responsible for all costs of collection, including any applicable altorneys' fees,

lof2


Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main

Case 16-70486-SCS Doc 3Pocumieat 07/Paye 3&0fHed 07/22/16 16:22:46 Desc
Notice of Motion Page 1 of 2

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF VIRGINIA

NORFOLK DIVISION
In re: Case No. 16-70486-SCS
Chapter 7
Brett Bud Hall,
Debtor.

NOTICE OF MOTION TO EXAMINE
DEBTORS’ TRANSACTIONS WITH HIS ATTORNEY
AND FOR DISGORGEMENT OF PAID FEES PURSUANT TO 11 U.S.C. § 329

Judy A. Robbins, the United States Trustee for Region Four has filed papers with the
court requesting the court to examine the debtors’ transactions with his attorney and for the
return of all funds paid to his attorney by the debtor or on his behalf, pursuant to section 329 of
the United States Bankruptcy Code, and Fed. R. Bankr. P, 2017.

Your rights may be affected. You should read these papers carefully and discuss them with
your attorney, if you have one in this bankruptcy case. (If you do not have an attorney, you may
wish to consult one.)

If you do not want the court to grant the relief sought in this motion, or if you want the
court to consider your views on the motion, then you or your attorney must:

(1) _ File with the court, at the address shown below, a written response 7 days prior to the
date set for the hearing pursuant to Local Bankruptcy Rule 9013-1(H). If you mail your
response to the court for filing, you must mail it early enough so the court will receive it
on or before the date stated above.

Clerk of Court

United States Bankruptcy Court

600 Granby Street

Norfolk, VA 23510

You must also mail a copy to: The Office of the United States Trustee
200 Granby Street, Room 625
Norfolk, VA 23510

Kenneth N. Whitehurst, III, Esq., AUST, VSB No. 48919

Cecelia Ann Weschler, Esq., VSB No. 28245

Nicholas S. Herron, Esq., NJSB No, 03007-2008, PASB No. 208988
Office of the United States Trustee

200 Granby Street, Room 625

Norfolk, VA 23510

(757) 441-6012


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Case 16-07024-SCS Doc 1D9cumentns/1BAGE 18mé RA 05/12/16 14:13:08 Desc

Adversary Proceeding Cover Sheet

B104 (FORM 104) (08/07)

Page 1 of 2
EDVA

ADVERSARY PROCEEDING COVER SHEET ADVERSARY PROCEEDING NUMBER
(Instructions on Reverse) (Court Use Only)
PLAINTIFFS DEFENDANTS
NAVY FEDERAL CREDIT UNION BRETT BUD HALL
ATTORNEYS (Firm Name, Address, and Telephone No.) ATTORNEYS (If Known)

Anastasia P. Kezman, Esq., Deborah S. Kirkpatrick, PC
P.O. Box 10275, Virginia Beach, VA 23450-0275

Edrie Pfeiffer, Esq.,
372 S. Independence Pkwy, Ste. 109

STA

PARTY (Check One Box Only)

a Debtor 0 US. Trustee/Bankruptcy Admin
@ Creditor ci Other
c Trustee

Virginia Beach

PARTY (Check One Box Only)

@ Debtor GUS. Trustee/Bankruptey Admin
6 Creditor 6 Other
O Trustee

CAUSE OF ACTION (WRITEA BRIEF STATEMENT OF CAUSE OF ACTION, INCLUDING ALL US. STATUTES INVOLVED)

NECU seeks an order declaring that the Debtor's discharge be denied pursuant to 11 U.S.C.§§ 727(a)(2)(A) & (a)(4), and/or in the
alternative, that the Order declare that the secured debt owed to NFCU by the Debtor in the amount of $50,343.84, plus accruing
interest and fees, be deemed non-dischargeable pursuant to 11 U.S.C. Section 523(a)(6).

NATURE OF SUIT

(Number up to five (5) boxes starting with lead cause of action as 1, first alternative cause as 2, second alternative cause as 3, etc.)

FRBP 7001(1) — Recovery of Money/Property

LL-Recovery of money/property - §542 turnover of property

12-Recovery of money/property - §547 preference

13-Recovery of money/property - §548 fraudulent transfer
1 14-Recovery of money/property - other

FRBP 7001(2)— Validity, Priority or Extent of Lien
(2 2i-validity, priority or extent of lien or other interest in property

FRBP 7001(3) ~ Approval of Sale of Property
31-Approval of sale of property of estate and of a co-owner - §363(h)

FRBP 7001(4) — Objection/Revocation of Discharge
a 4l-Objection / revocation of discharge - §727(c),(d),(e)

FRBP 7001(5) — Revocation of Confirmation
5L-Revoeation of confirmation

FRBP 7001(6) — Dischargeability

C2. 66-Dischargeability - §523¢a)(1),(14).(14A) priority tax claims

11 62-Dischargeability - §523(a)(2), false pretenses, false representation,
actual fraud

1 67-Dischargeability - §523(a)(4), fraud as fiduciary, embezzlement, larceny

(continued next column)

ERBP 7001(6) — Dischargeability (continued)
61-Dischargeability - §523(a)(5), domestic support
Z os.ischargeability - §523(a)(6), willful and malicious injury
C1 63-Dischargeability - §523(a)(8), student loan
1 64-Dischargeabitity - §523(a)(15), divorce or separation obligation
(other than domestic support)
C1 6sdischargeability - other

FRBP 7001(7) ~ Injunetive Relief
7 L-Injunctive relief — imposition of stay
‘7-Injunctive relief — other

ERBP 7001(8) Subordination of Claim or Interest
81-Subordination of claim or interest

ERBP 7001(9) Declaratory Judgment
91-Declaratory judgment

FRBP 7001(10) Determination of Removed Action
01-Determination of removed claim or cause

Other
2 ss-siPA Case - 15 U.S.C. §§78aaa et, seq.
02-Other (e.g. other actions that would have been brought in state court
if unrelated to bankruptcy case)

0 Check if this case involves a substantive issue of state law

co Check if this is asserted to be a class action under FRCP 23

10 Check if a jury trial is demanded in complaint

Demand $ 50, 343.84

Other Relief Sought
Attorney's Fees and Costs



Case 16-00703-SCS

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of these proceeds, if this settlement is approved, go to Navy
Federal, does that alter whether I should approve the
withdrawal of your motion?

MR. WHITEHURST: Well, Your Honor, my understanding --
and I've spoken with the Chapter 7 trustee in this case -- is
that this involves a car, as I said, that was completely
underwater, and that the Chapter 7 estate abandoned it,
effectively, because it had no interest in it. So that the
loss here really is -- at the time I drafted it, I said we had
took no position on it because we didn't know -- as far as I
understand, as far as all the parties in the case with an
actual pecuniary interest in the result have agreed that Navy
Federal is the one who was actually harmed here, because it was
their -- it was car on which they had a lien, and so they were
the ones who ultimately had to try to recover it.

The Chapter 7 trustee, I don't believe she would here,
because this was an asset she had abandoned. So it wasn't an
issue for the Chapter 7 estate in that sense, unless the Court
believe that there was some harm to the Chapter 7 estate
through this that I haven't thought of. I certainly accept the
Court's criticism, if that's the case. But that was my
understanding of the situation, that because this involved a
car that really was between the debtor and Navy Federal at this
point in the proceedings, Navy Federal really is the proper

recipient of the money.

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Q The parties have agreed to fully resolve the matters set forth in the Motion on the
terms described herein.
For these reasons, and good cause having been shown, the Court hereby ORDERS as follows:

1. The Motion is GRANTED.

2. All fee agreements between the debtor and HRLS are hereby cancelled, pursuant

to 11 U.S.C. §329(b).
3. Having disgorged all fees paid for the representation of the debtor in this case,

Edrie A. Pfeiffer and HRLS shall receive no additional compensation for the representation of

the debtor in this case, from any source.

ENTER:

Entered on I —
Docket on. .
Whit ites Bankruptcy Judge

Seen and agreed:

/s/ Kenneth N. Whitehurst, II
Kenneth N. Whitehurst, III, Esq.
Assistant United States Trustee

/s/ Edrie A. Pfeiffer (By Mr. Whitehurst with permission from Ms. Pfeiffer
Edrie A. Pfeiffer, Esq. received by email on August 12, 2016)

Counsel for the debtor,

and for herself and

Garfinkel and Pfeiffer, P.C.

dba Hampton Roads Legal Services

Local Rule 9022-1(C) Certification

The foregoing Order was endorsed by and/or served upon all necessary parties pursuant
to Local Rule 9022-1(C).

/s/Kenneth N. Whi Til
Kenneth N. Whitehurst, III

NOTICE OF JUDGMENT OR ORDER

merges Shs



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4. NFCU is the holder of a Promissory Note, Security Agreement and
Disclosure in the original amount of $53,186.49, secured by a lien on a 2015 Toyota
Tacoma, VIN: 5TFUU4EN8FX 133820 (“Vehicle”). On the front page of the Note,
Agreement and Disclosure, the Debtor, “Brett B. Hall” is identified as the
“Applicant,” with a signature date of April 20, 2015. (A copy of the Note,
Agreement and Disclosure is attached and incorporated herein at Exhibit 1).

5. On the Note, Agreement and Disclosure, the Debtor indicates that
the purpose of the loan is for the purchase of a new vehicle. In the section titled
“Truth and Lending Disclosure,” the Debtor “pledge[s] a security interest in the
collateral described below”, which is described as a 2015 Toyota Tacoma, VIN:
STFUU4ENS8F X 133820 (“Vehicle”), See Exhibit 1.

6. On the top of the Note, Agreement and Disclosure, there is a
statement that says: “This document includes a Promissory Note, Security
Agreement and a Truth-in Lending Disclosure. Please read everything carefully.
There are additional terms and conditions on the reverse side. You are bound by
those terms and conditions as well as those on this side.” See Exhibit 1.

7. On the reverse side, under the section entitled “Security
Agreement,” it states: “The owner will defend the collateral against claims and
demands of other persons and will not permit any other liens to the attached
collateral. The owner ... will not knowingly permit any action to impair its
present value. The owner will obtain written consent of Navy Federal prior to
disposing of collateral.” See Exhibit 1.

8. NECU is the holder of a Certificate of Title issued by the State of
Virginia, which indicates that the owner of a 2015 Toyota Tacoma, VIN:
5TFUU4EN8FX 133820, is Hall, Brett Bud, and the lien holder on this Vehicle is Navy
Federal Credit Union. The lien on Title was established on April 29, 2015. (A copy of


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Pfeiffer advised the debtor to participate in the Sperro scheme, and accepted from Sperro
proceeds which she knew or should have known were wrongfully obtained.

39. This Court should examine the transactions between the debtor, HRLS, and Ms.
Pfeiffer pursuant to 11 U.S.C. §329, and order the disgorgement of all fees.

ARGUMENT

Section 329 of the Bankruptcy Code and Fed. R. Bankr. P. 2017 " ‘furnish the court with
express power to review payments to attorneys for excessiveness."" Burd y. Walters (In re
Walters), 868 F.2d 665, 667 (4th Cir.1989) (citing In re Martin, 817 F.2d 175, 180 (1st
Cir.1987)). Section 329(a) requires every attorney representing a debtor to file with the court a
statement of all compensation received during the preceding year, or to be received, in
connection with the bankruptcy. Section 329(b) requires bankruptcy judges to use the
information supplied under § 329(a) to determine whether "such compensation exceeds the
reasonable value of any such services." If it does, then "the court may cancel any such
agreement, or order the return of any such payment, to the extent excessive." 11 U.S.C. § 329;
Fed. R. Bankr.P. 2017.

Under § 329, ethical conflicts can diminish the value of services to a client, making the
fee charged “excessive.” See In re Soulisak, 227 B.R. 77, 82 (E.D. Va. 1998) (stating § 329 and
state ethical rules permit the court to consider attorney’s unethical conduct in analyzing
reasonableness of legal fees and ordering all fees to be disgorged in four chapter 7 cases because
lawyers violated Virginia ethics rules governing the unauthorized practice of law). Collier
reviews the philosophy undergirding § 329:

Section 329 of the Bankruptcy Code is an example of the
bankruptcy court's traditional concern for the need to scrutinize

carefully the compensation paid to the debtor's attorney. Courts
have long recognized that the debtor is in a vulnerable position and


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Colloquy
and had been working with attorneys throughout the country on
this program.

I did an independent investigation before I ever did
it. I waited to see how this program worked. It was working
successfully throughout the country. The benefits to the
debtor were that they no longer had to worry about the vehicle,
that it was in a secure location.

The company had indicated originally that they
contacted the creditor as soon as they took possession of the
vehicle, and they would normally make arrangements to liquidate
the vehicle for them.

Unfortunately, the individual that was running this
company became, quite frankly, unscrupulous. And that's well
documented throughout the country, at the end of last year that
quite -- he did. He started not abiding by the law, not
notifying the creditors, as he was telling counsel that he was
doing, not doing any of the things that he was supposed to be
doing. He was supposed to be housing the vehicles locally and
then liquidating them on behalf of the creditors.

I talked to the individual myself. He said, I've
worked with Navy Federal on many cases. They almost always
choose to have us litigate -- or liquidate the vehicle on their
behalf and give them the profits.

I knew that this was working throughout the country

successfully in other cases. And then in December was when we

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Colloquy
MS. PFEIFFER: -- for his actions.
THE COURT: -- Ms. -- let me interrupt you.

As an officer of the court, would you have done
this -- would you have recommended this if it had not had the
result of having your fees paid?

MS. PFEIFFER: That --

THE COURT: I think the answer is no. And that's part
of what makes this so wrong. I cannot -- these excuses of I'm
going to tow somebody -- I'm going to tow a car from Virginia
to Indiana to help the secured creditor -- and I've got to say,
Ms. Kezman, if your client previously thought this was a good
idea, perhaps the federal banking regulatory authorities should
be notified. And I'm quite serious about that.

That is -- isn't the only reason why this was done was
to try an extort the payment of your fees from a secured
creditor who has no obligation to do it?

MS. PFEIFFER: Your Honor, no. And to say that the
only -- I would only recommend this because they were paying
the fees, that was a benefit to the debtor, was that in
exchange for participating in this program his fees were paid.
But that is not the only reason. There are other companies
that do this where they secure collateral for debtors. They
don't pay the attorneys' fees. They have legitimate operations
like this. And to say that I would not have recommended this

if my attorneys' fees were not going to be paid -- my client

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Colloquy
would have been paid the attorneys' fees.

I settled this with him and I paid this money
willingly out of it because I didn't want my client to suffer
any harm for this. He is young. He's in the navy. He's been
transferred. He doesn't have the ability to defend this,
obviously.

I think that the -- they would have difficulty proving
that he had any actual fraud in this. And that's why I settled
it for it. Yes, it was done on my advice. I made him aware of
the program. I freely admitted to that. I've cooperated at
every step that I could with trying to do whatever I could to
get this issue resolved.

But to say that I would not have recommended this
program as it was originally described to me, and as I
understood it to be working throughout the country, only if my
attorneys' fees would be paid, I don't think that is a fair
statement, Your Honor. That was a benefit in it, but that was
not the intent of this program. The intent was to --

THE COURT: Well, what was the intent? Why would it
ever be a good idea, without the consent of a secured creditor,
to move their collateral halfway across the country?

MS. PFEIFFER: Your Honor, that was not the original
intent of the program. The collateral was supposed to be
stored regionally within a local region for it. Yes, Sperro

changed their practices and started transporting the collateral

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23. Pursuant to the Sperro Agreement, Sperro acquired a security interest in the
Vehicle.

24. Ms. Pfeiffer advised the debtor to participate in the “New Car Custody Program”
to, among other things, fund payment of her legal fees for this bankruptcy case.

25. Along with the Sperro Agreement, the debtor signed an Odometer Disclosure
Statement from the Indiana Bureau of Motor Vehicles. A copy of this Statement is attached as
Exhibit C. The Statement identifies the debtor as the “seller” of the Vehicle.

26.  Sperro provided the Statement form to the debtor to obtain the necessary
paperwork to permit Sperro to convert the debtor’s Vehicle and deprive NFCU of its security
interest in the Vehicle.

27. On information and belief, in December, 2015, an agent of Sperro took possession
of the Vehicle and transferred it from the debtor’s home.

28. By entering into the Sperro Agreement upon the advice of Ms. Pfeiffer, the
Debtor became contractually obligated to Sperro to pay towing and storage fees and other
charges, and in the event of non-payment, Debtor granted Sperro a statutory lien on the Vehicle.
As a result, under the Sperro Agreement, Sperro became a creditor of the Debtor, and it remains
a contingent creditor because of the indemnity provision contained in the Sperro Agreement.
The Debtor’s Schedules do not list Sperro as a creditor.

29. Based upon Ms. Pfeiffer’s legal advice, the debtor transferred the Vehicle to
Sperro in connection with and in contemplation of filing his bankruptcy case in order to pay the

legal fees for Ms. Pfeiffer’s bankruptcy representation and to pay his bankruptcy case filing fee.


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duties. So don't think you're going to buy peace with the

Court, whatever you do. I have an independent and very solemn
responsibility on that. And again, I'm not going to -- if you

up the ante with Navy Federal, it is not influential on what I
ultimately decide to do in the exercise of my duties. So it's

up to you.

But I just -- I don't want you to think if you pay
more money to Navy Federal, you're finished, because you may
be, you may not be. But it's not going to be influenced at all
by whether you decide to change this agreement. As a matter of
fact, this agreement is of little moment in my ultimate
decision as to what to do with this, and again, in the exercise
of my responsibilities. So --

MS. PFEIFFER: I understand, Your Honor. I have taken
every effort I can to make sure that my client did not suffer
anything for this participation in this program, and I continue
to do that. I negotiated this agreement in good faith with
Navy Federal. This was, I believed, a hands-off agreement as
to settlement of the terms of it, and that's why we're here
today.

I understand if Your Honor has other concerns, and I
will be happy to cooperate with anything that this Court or the
Bar requires of me on this. As I said, I have tried -- I tried
to make sure that everything was being done in an ethical

manner. Unfortunately, it turned out the person that we were

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duty to refrain from counseling or assisting a client in the commission of criminal or fraudulent
conduct.’ Finally, such actions offend Ms. Pfeiffer’s professional obligation to refrain from
dishonest, fraudulent, or deceitful conduct that adversely reflects on her honesty, trustworthiness,

or fitness to practice law.

Therefore, the Court finds that Ms. Pfeiffer should appear and show cause why her actions
do not violate Virginia Rules of Professional Conduct 1.1, 1.2(c), 8.4(b), and 8.4(c); why she should
not be held in contempt; and why appropriate sanctions should not be assessed against her asa result

of the actions detailed above, including, but not limited to, imposition ofa monetary fine, suspension

would be stored: “Sperro agrees to take possession of, transport, and provide storage on a daily
basis of the below-described vehicle(s) in either of its secure outdoor storage facilities located at
2534 Bluff Road, Indianapolis, Indiana 46225 and 2334 South California Street, Indianapolis,
Indiana 46225 (the ‘facilities’).” See Motion to Examine, Exhibit B, Transporting and Storage
Authorization Agreement, dated December 11, 2015, at 1. Paragraph 5 of the agreement also
sets forth the two aforementioned locations at which the Vehicle would be stored.

7 It appears that Virginia Code § 18.2-115 may have been violated here. Section 18.2-
115 provides:

Whenever any person is in possession of any personal property, including motor
vehicles or farm products, in any capacity, the title or ownership of which he has
agreed in writing shall be or remain in another, or on which he has given a lien, and
such person so in possession shall fraudulently sell, pledge, pawn or remove such
property from the premises where it has been agreed that it shall remain, and refuse
to disclose the location thereof, or otherwise dispose of the property or fraudulently
remove the same from the Commonwealth, without the written consent of the owner
or lienor or the person in whom the title is, or, if such writing be a deed of trust,
without the written consent of the trustee or beneficiary in such deed of trust, he shall
be deemed guilty of the larceny thereof.

Va. Code Ann. § 18.2-115. While a determination of whether the conduct here constitutes a
violation of this or any other section of either the United States or the Virginia Codes defining
criminal activity is, of course, beyond the purview of this Court, the actions in which Ms.
Pfeiffer counseled Mr. Hall to participate arguably appear to be in violation of the unlawful
action quoted in the aforementioned code section.

7


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counseling or assisting a client in the engagement of criminal or fraudulent activity: “A lawyer shall
not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or
fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with
a client and may counsel or assist a client to make a good faith effort to determine the validity,
scope, meaning, or application of the law.” Jd. 1.2(c). Likewise, pursuant to Virginia Rule of
Professional Conduct 8.4(b), “[iJt is professional misconduct for a lawyer to... commit a criminal
or deliberately wrongful act that reflects adversely on the lawyer’s honesty, trustworthiness or
fitness to practice law.” Id. 8.4(b). Finally, Rule 8.4(c) states that a lawyer also engages in
professional misconduct if he “engage[s] in conduct involving dishonesty, fraud, deceit or
misrepresentation which reflects adversely on the lawyer’s fitness to practice law.” Id. 8.4(c).
Ms. Pfeiffer’s actions of counseling Mr. Hall to enter into an agreement to transfer
encumbered property to a third party without the lienholder’s consent in order to secure payment
of her attorney fees by the third party, which ultimately subjected Mr. Hall to the possibility of
denial of his discharge, contravenes the competent, honest manner in which this Court expects the

members of its bar to govern their practice at all times.’ Ms. Pfeiffer’s actions also defy a lawyer’s

® In this vein, the Court must note that, during the September 8, 2016 hearings, Ms.
Pfeiffer referenced no less than three times that the location at which the Vehicle was to be
stored by Sperro changed between the time she became aware of the program (apparently at
some point in 2015) and when Mr. Hall signed the agreement with Sperro. Transcript of
September 8, 2016 hearings, at 6-7 (stating that Sperro “was supposed to be housing the vehicles
locally and then liquidating them on behalf of the creditors” but “in December . . . we found out
that [the Sperro representative] had changed his practices”); id. at 9-10 (“The collateral was
supposed to be stored regionally within a local region for it. Yes, Sperro changed their practices
and started transporting the collateral long distances for it. But as was originally printed, it was
that they had like little hubs that they presented that they stored the collateral at ....”); id. at 17
(“I would never have gone into this program if I were aware of the sight—the facts that came out
after we'd already committed to it.”). However, the agreement Mr. Hall entered into with
Sperro, dated December 11, 2015, clearly provides the possible locations where the Vehicle

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Adversary Proceeding Cover Sheet Page 2 of 2
B104 (FORM 104) (08/07), Page 2

BANKRUPTCY CASE IN WHICH THIS ADVERSARY PROCEEDING ARISES

NAME OF DEBTOR BANKRUPTCY CASE NO.
BRETT BUD HALL 16- 70486-SCS
DISTRICT IN WHICH CASE IS PENDING DIVISION OFFICE NAME OF JUDGE
Eastern District of Virginia Norfolk Stephen St. John
RELATED ADVERSARY PROCEEDING (IF ANY)
PLAINTIFF DEFENDANT ADVERSARY
PROCEEDING NO.
DISTRICT IN WHICH ADVERSARY IS PENDING DIVISION OFFICE NAME OF JUDGE
SIGNATURE OF ATTORNEY (OR PLAINTIFF)
/s/ Anastasia P. Kezman, Esq.
DATE PRINT NAME OF ATTORNEY (OR PLAINTIFF)
05/12/16 Anastasia P. Kezman, Esq.
INSTRUCTIONS

The filing of a bankruptcy case creates an "estate" under the jurisdiction of the bankruptcy court which consists of
all of the property of the debtor, wherever that property is located. Because the bankruptcy estate is so extensive and the
jurisdiction of the court so broad, there may be lawsuits over the property or property rights of the estate. There also may be
lawsuits concerning the debtor’s discharge. If such a lawsuit is filed in a bankruptcy court, it is called an adversary
proceeding.

A patty filing an adversary proceeding must also complete and file Form 104, the Adversary Proceeding Cover
Sheet, *unless the party files the adversary proceeding electronically through the court’s Case Management/Electronic Case
Filing system (CM/ECF). (CM/ECF captures the information on Form 104 as part of the filing process.) When completed,
the cover sheet summarizes basic information on the adversary proceeding. The clerk of court needs the information to
process the adversary proceeding and prepare required statistical reports on court activity.

The cover sheet and the information contained on it do not replace or supplement the filing and service of pleadings
or other papers as required by law, the Bankruptcy Rules, or the local rules of court. The cover sheet, which is largely self-
explanatory, must be completed by the plaintiff’s attorney (or by the plaintiff if the plaintiff is not represented by an
attorney). A separate cover sheet must be submitted to the clerk for each complaint filed.

Plaintiffs and Defendants. Give the names of the plaintiffs and defendants exactly as they appear on the complaint.
Attorneys, Give the names and addresses of the attorneys, if known.

Party. Check the most appropriate box in the first column for the plaintiff's and the second column for the defendants.
Demand. Enter the dollar amount being demanded in the complaint.

Signature. This cover sheet must be signed by the attorney of record in the box on the second page of the form. If the
plaintiff is represented by a law firm, a member of the firm must sign. If the plaintiff is pro se, that is, not represented by an

attorney, the plaintiff must sign.

*Per LBR 7003-1, in the EDVA, a properly completed Adversary Proceeding Cover Sheet is required.



Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main

Case 16-07024-SCS Doc1 Preumeniz/1ePaget@ret9%/12/16 14:13:08 Desc Main
Document Page1of9

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF VIRGINIA

NORFOLK DIVISION Attachment A
In re:
BRETT BUD HALL Chapter 7
Debtor. Case No. 16-70486-SCS

NAVY FEDERAL CREDIT UNION,

Plaintiff, APN:
BRETT BUD HALL
Defendant.
0 x LY 9 9 0
DISCHARGEABILITY OF DEBT

COMES NOW, Navy Federal Credit Union ("NFCU"), by counsel, and files this
Complaint to object to the Debtor’s chapter 7 discharge pursuant to 11U.S.C. §727(¢)(1),
§727(a)(2)(A) and (a)(5), and to determine the dischargeability of NFCU’s secured debt
pursuant to 11U.S.C.§ 523(6), and states as follows to-wit:

1. Brett Hall ("Debtor") filed the instant case for bankruptcy relief on February
17, 2016.

2. The Court has jurisdiction over this matter pursuant to 28 U.S.C.§§ 157 and 1334
and 11 U.S.C §§ 727 and 523 and Federal Rule of Bankruptcy Procedure 7001. This is core

proceeding within the meaning of 28 U.S.C.§ 157(6).
3. Venue is proper in this district pursuant to 28 U.S.C. § 1409(a).

Anastasia Kezman, Esq.

VSB#H33325

Deborah Kirkpatrick, P.C.

Post Office Box 10275

Virginia Beach, VA 23450-0275

Ph: (757) 343-3869; Fax: (757) 233-0277
Anastasiak10@cox.net

Counsel for Navy Federal Credit Union


Case 16-00703-SCS

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Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
Case 16-70486-SCS Doc 44 Dotletheat12/Ragé BtefwW29/12/16 12:08:10 Desc Main

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Colloquy 21

THE COURT: All right.

MR. WHITEHURST: -- are true, and that the fee
agreements are then canceled, and having disgorged the fees
paid, Ms. Pfeiffer and HRLS, which is her firm, shall receive
no additional compensation from the debtor in this case or from
any source on behalf of the debtor.

THE COURT: All right. Ms. Pfeiffer, this order bears
your endorsement. Does this remain your desire to urge the
Court to enter this order?

MS. PFEIFFER: Yes, Your Honor.

THE COURT: All right. I will so do.

MR. WHITEHURST: Thank you, Your Honor.

THE COURT: All right, thank you all.

IN UNISON: Thank you, Your Honor.

(Whereupon these proceedings were concluded at 11:33 A.M.)

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Case 16-00703-SCS

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Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
Case 16-07024-SCS_ Doc Dacupiiedt05/1Page FniefO205/12/16 14:13:08 Desc
Exhibit(s) Transporting and Storage Authorization Agreement Page 3 of 3

ODOMETER DISCLOSURE STATEMENT
‘State Form 43730 (R3 / §-13) "
INDIANA BUREAU OF MOTOR VEHICLES

yon In accordance with federal end state law, the seller of @ motar vehicle must disciose the current misage to 8 purcheser in
writing upon transfar of ownership. The disclosure must be signed by the seller, Including the printed name. if more than one
parson Is @ seffer, only one selier is required to sign the written disclosure.

2. The purchaser must sign the disclosure stalemenl, Including printed name and address, and retum a copy to the seller,

3. Complete this form in its entirety. in blue or black ink.

Federal and State law requires that you state the mileage upon transfer of ‘ownership. Feilure to complete or providing a faise
statement may result in fines, imprisonment, or both.

1 Byets 7% We WN : residing at:
Printed name(s} of Seber(s) .

S69 JEANNE Sh _wovquie BEAN, VA 234%C certity to the best of my knowledge that tho
‘Address of Seller(s) (number bcd street, cRy, stale, and ZIP code)

odometer reading ia the actual mileage of the vehiclo described below unless one. of the following statements is checked:

Miles (a0 tonthe) fo 1. thereby certify that to the best of my knowledge the odometer reading reflects the amount of
7¢ . mileage in excess of its mechanical limits. -
7 4 a) ( 2. thereby certify that the odometer reading is NOT thé actual mileage and should not be relied upon.

WARNING - ODOMETER DISCREPANCY.

‘Venicte Make Vehicle Mode! ‘Vehicle Year ‘Vehicle Body Type
Toyor A TRC OMe. 201s” Trek

Vehicle identification Number (VIN) ‘Transfer Date (month, day, your)
oSlrjelvloly le lw islelxli [3}a] eo] 2[ Sl oc wv, zoe”

I will not hold the Bureau of Motor Vehicles or the Bureau of Motor Vehicles Commission responsible for any discrepancy shown on
the odometer reading. |, the undersigned, swear or affirm that the information entered on this form is correct. | understand that
making a false Spilman may constitute the crime of pequry.

t i 1 ‘Bats (mth, day, yee
HM

Za f ia NN

DEC hh 261

PURCHASER’S INFORMATION

lam aware of and acknowledge the above odometer certification made by the soller(s).
Signature) ok Purchase) Date (mionlh, day, year)

Printod Nama(s) of Purchaser(e)

‘Adsroes of Purchaser) (number and sireot)

Cy Sule iP Code



Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
Document Page 1 of 92

UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF VIRGINIA
NORFOLK DIVISION

In re:

EDRIE A. PFEIFFER, ESQUIRE. Miscellaneous Proceeding

ORDER TO SHOW CAUSE AGAINST
EDRIE A. PFEIFFER, ESQUIRE

On September 8, 2016, this Court held hearings on the Motion to Approve Settlement of
Complaint (“Motion to Approve”), filed on August 10, 2016, by Navy Federal Credit Union
(“NFCU”), by counsel, and the Motion to Examine Debtor’s Transactions with His Attorney and
for Disgorgement of Paid Fees Pursuant to 11 U.S.C. § 329 (“Motion to Examine”), filed on July
22, 2016, by the United States Trustee. Both motions were filed in the bankruptcy case of Brett Bud
Hall (“Mr. Hall”), Bankruptcy Case No. 16-70486-SCS. The Motion to Approve sought approval
of a settlement regarding a complaint filed against Mr. Hall by NFCU on May 12, 2016, which
initiated Adversary Proceeding No. 16-07024-SCS (“Complaint”). The Complaint and exhibits
thereto are attached to this Order as Attachment A. The Motion to Examine and exhibits thereto are
attached to this Order as Attachment B.'

Both the Complaint and the Motion to Examine were based on the same undisputed facts and
are summarized as follows. In December 2015, before the filing of his bankruptcy petition, Mr. Hall
met with Edrie A, Pfeiffer, Esquire (“Ms. Pfeiffer”), to discuss filing for bankruptcy protection. Ms.
Pfeiffer advised Mr. Hall to contact Sperro, LLC (“Sperro”), a company that would take possession

of Mr. Hall’s vehicle, a 2015 Toyota Tacoma (the “Vehicle”). In exchange, Sperro would pay Ms.

' Exhibit B to the Motion to Examine was filed on the same date as a separate docket
entry (Entry 33); it is incorporated sequentially into the exhibits to the Motion to Examine.


Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main

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State of Michigan.
ANSWER: Neither admitted nor denied on the basis that Defendant does not have
sufficient knowledge or information to form a conclusion regarding the validity of this

allegation.
20. Although NFCU has never received a notice of mechanic’s lien sale by Sperro, LLC,

NECU asserts and alleges that Sperro, LLC may have fraudulently sold the 2015 Toyota Tacoma
in accordance with it's fraudulent scheme executed through the terms of the TSSA. NFCU has

attempted 1o contact Sperro, LLC, and it refuses to respond it its inquiries regarding the location of
the Vehicle or the terms upon with the Vehicle can be released to the possession of the lienholder,
NFCU, Therefore, NFCU must assume that Sperro, LLC no longer has the Vehicle and it is likely
to have been sold.

ANSWER: Neither admitted nor denied on the basis that Defendant does not have
sufficient knowledge or information to form a conclusion regarding the validity of this
allegation.

21. In light of these alleged facts and circumstances, NFCU submits that the Debtor’s
discharge should be denied in accordance with 11 U.S.C. § 727 (a)(2)(A) as the Debtor, with intent
to hinder, delay or defraud a creditor... has transferred, removed, destroyed, mutilated, or
concealed, or has permitted to be transferred, removed, destroyed, mutilated or concealed, property
of the Debtor (namely the 2015 Toyota Tacoma,) within one year before the date of the filing of
the petition.

ANSWER: Paragraph 21 is a legal conclusion and requires no response. he
extent an answer is required, the allegations contained in Paragraph 21 are neither admitted
or denied on the basis that Defendant does not have sufficient knowledge or information to
form a conclusion regarding their validity.

22. The Debtor’s intent to hinder, delay and defraud NFCU can be inferred from the
Debtor's actions and {rom the facts and circumstances surrounding his willful and voluntary
transter of NFCU’s collateral to Sperro, LLC. At the time the Debtor entered into the TSSA with
Sperro, LLC, the Debtor had no legitimate need for the transportation and storage services of

Edrie A. Pleiffer 41791
Hampton Roads Legal Services
372 S, Independence Blvd.
Suite 109

Virginia Bench, VA 23452
(757) 340-3100


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tenth (10") day following Sperro’s possession of the Vehicle.... Failure to pay
the Initial Fees by the fifteenth as) day following Sperro’s possession of the
Vehicle shall result in the Owner being declared in default of this Agreement and
shall subject the Vehicle to mechanic’s lien foreclosure proceedings ...pursuant to
Indiana Civil Code ... Owner understands that if any fees due hereunder are not paid
when due, Sperro is granted an express security interest in the Vehicle in addition to the
statutory mechanic’s lien afforded to Sperro under Indiana law.” See Exhibit 3.

15. On Official Form 107, “Statement of Financial Affairs for Individuals
Filing for Bankruptcy” signed under penalty of perjury by the Debtor, under Part 7, in
answer to question 16: “Within 1 year before you filed for bankruptcy, did you or anyone
else acting on your behalf pay or transfer any property to anyone you consulted about
seeking bankruptcy or preparing a bankruptcy petition,” the Debtor responded:
“Hampton Roads Legal Services received $1,835.00 from Sperro, LLC in December
2015.” Further, in the Petition’s Disclosure of Compensation of Attorney for the Debtor,
Debtor’s counsel acknowledges the receipt of $1,835.00 from Sperro, LLC.

16. On Official Form 107, “Statement of Financial Affairs for Individuals
Filing for Bankruptcy” signed under penalty of perjury by the Debtor, under Part 7, in
answer to question 18: “Within 2 years before you filed for bankruptcy, did you sell,
trade, or otherwise transfer any property to anyone, other than property transferred in the
ordinary course of your business or financial affairs,” the Debtor’s schedule reflects the
2015 Toyota Tacoma was transferred to Sperro, and specifically states that “Sperro paid
$1,835 directly to Hampton Roads Legal Services to pay for Mr. Halls Bankruptcy” in
December 2015.

17. Official Form 108, “Statement of Intention for Individuals filing
Under Chapter 7” signed under penalty of perjury by the Debtor, under Part 1, after the
Debtor identifies NFCU as the creditor that has a secured claim on the 2015 Toyota
Tacoma, the Debtor then indicates that he intends to surrender this collateral,

4


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the Title is attached and incorporated herein as Exhibit 2.)

9. The Vehicle at all times since the origination of the Note has been
fully encumbered by NFCU’s lien. Since the Debtor obtained possession of the
Vehicle, there has never been any equity in the Vehicle for the benefit of the
Debtor.

10. Prior to filing of the instant bankruptcy petition, the Debtor
defaulted on the Note. As of the filing date, the payoff on the Note was
$50,343.84 and the arrears were $1,821.56.

lL. Upon information and belief, the Debtor met and conferred with his
bankruptcy counsel on or before December 2015.

12. Upon information and belief, the Debtor, either directly or through
counsel, contacted Sperro, LLC, a towing company, to negotiate the payment of
Debtor’s legal fees and costs associated with the filing of Debtor’s bankruptcy
petition,

13. On December 11, 2015, the Debtor willfully and intentionally
entered into and signed a Transporting and Storage Authorization Agreement
(«TSSA”) with Sperro, LLC, in exchange for Sperro, LLC’s payment of Debtor’s
bankruptcy fees directly to Debtor’s counsel. Pursuant to the TSSA, the Debtor
also agreed to pay the following: a $75.00 vehicle load and a $75.00 vehicle unload
fee; a charge of $1.85 per mile to tow the Vehicle to Indiana from Virginia; a daily
storage fee of $45.00 per day; a one-time key charge fee of $175.00 and a one time
facility insurance fee of $250.00. On the four corners of the TSSA, there is no monetary
consideration provided by Sperro, LLC for its right to take possession of the Vehicle. (A
copy of the TSSA is attached and incorporated herein as Exhibit 3).

14. The TSSA further provides “ All transportation-related fees and the

first ten (10) days of storage fees (the “Initial Fees”) are due and payable on the


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G. Ms. Pfeiffer advised the debtor to transfer the Vehicle to Sperro, LLC (“Sperro”),
which would sel! the vehicle, and use the proceeds to pay the debtor’s bankruptcy filing fees, and
all fees due to HRLS for Ms. Pfeiffer’s representation of the debtor in this bankruptcy case.

H. The debtor, on the advice of Ms. Pfeiffer, entered into an agreement to transfer
the Vehicle to Sperro.

L As a result of the debtor’s transfer, HRLS received $1,835 from Sperro.

J. Of the $1,835 received, HRLS paid $335 to the Court for the debtor’s filing fee.

K. On May 12, 2016, NFCU filed a Complaint seeking denial of the debtor’s
discharge under 11 U.S.C. §727 and a determination that the debt owed by the debtor to NFCU
was non-dischargeable, pursuant to 11 U.S.C. §523. Navy Federal Credit Union v. Brett Bud
Hall, APN: 16-07024. The Complaint was factually predicated upon the debtor's transfer of the
Vehicle to Sperro, LLC.

L. On June 14, 2016, the debtor filed an Answer to NFCU’s Complaint, asserting
numerous affirmative defenses, including his reliance on the advice of counsel.

M. __HRLS has paid $4,000 to Navy Federal Credit Union, in settlement of Adversary
Proceeding.

N. Of the $4,000 paid to NFCU, $1500 represented the amount paid to HRLS by
Sperro, LLC, for her representation of the debtor in this bankruptcy case.

©. The amount paid to HRLS for Ms. Pfeiffer’s services in this case exceeds the
reasonable value of such services.

P. Ms. Pfeiffer represents that she has not advised any debtors other than the debtor

in this case to transfer their vehicle to Sperro, LLC in exchange for the payment of her fees.

1


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3. Venue is proper in this district pursuant to 28 U.S.C. § 1409(a).

ANSWER: ADMITTED

4, NFCU is the holder of a Promissory Note, Security Agreement and Disclosure in the
original amount of $53,186.49, secured by a lien on a 2015 Toyota Tacoma, VIN:
STFUU4EN8FX 133820 (“Vehicle”). On the front page of the Note, Agreement and Disclosure,
the Debtor, “Brett B. Hall” is identified as the “Applicant,” with a signature date of April 20, 2015.
(A copy of the Note, Agreement, and Disclosure is attached and incorporated herein as Exhibit 1).

ANSWER: Neither admitted nor denied. Document speaks for itself.

5. On the Note, Agreement and Disclosure, the Debtor indicates that the purpose of the
loan is for the purchase of a new vehicle. In the section titled “Truth and Lending Disclosure,” the
Debtor “pledge[s] a security interest in the collateral described below”, which is described as a
2015 Toyota Tacoma, VIN: 5TFUU4EN8EX133820 (“Vehicle”). See Exhibit 1.

ANSWER: Neither admitted nor denied. Document speaks for itself.

6. On top of the Note, Agreement and Disclosure, there is a statement that says: “This
document includes a Promissory Note, Security Agreement and a Truth-In-Lending Disclosure.
Please read everything carefully. There are additional terms and conditions on the reverse side.
You are bound by those terms and conditions as well as those on this side.” See Exhibit 1.

ANSWER: Neither admitted nor denied. Document speaks for itself.

7. On the Reverse side, under the section entitled “Security Agreement,” it states: “The
owner will defend the collateral against claims and demands of other persons and will not permit
any other fiens to the attached collateral, The owner... will not knowingly permit any action to
impair its present value. The owner will obtain written consent of Navy Federal prior to disposing
of collateral.” See Exhibit !.

ANSWER: Neither admitted nor denied, Document speaks for itself.

8. NFCU is the holder of a Certificate of Title issued by the State of Virginia, which
indicates that the owner of a 2015 Toyota Tacoma, VIN: 5TFUU4ENS8FX 133820, is Hall, Brett
Bud, and the lien holder on this vehicle is Navy Federal Credit Union. The lien on Title was
established on April 29, 2015. (A copy of the Title is attached and incorporated herein as Exhibit

Edrie A. Pfeiffer 41791
Hampton Roads Legal Services
372 S. Independence Blvd.
Suite 109

Virginia Beach, VA 23452
(757) 340-3100


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22
INDEX
RULINGS: PAGE LINE
Motion to approve settlement is granted. 20 5
U.S. Trustee's motion to disgorge fees 21 11

is granted.

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36. The chapter 7 trustee conducted the 11 U.S.C. §341 meeting of creditors on
March 16, 2016.
37. In response to the chapter 7 trustee’s questions, the debtor testified as follows:

Q: Did you transfer or sell any of your assets in the last two
years?

A: The Tacoma, to Sperro.

seek

Qa So you sold it to them, and the money went directly to pay
for your bankruptcy?

A: Yes ma’am.

Q: Okay. Did you get fair value? I mean, was the thing worth
any more than that, or just had a lien on it that covered the
rest of it?

A: That was for them to work out with Navy Federal.

2

Q But you got the money from the sale of the Tacoma, and
you paid your bankruptcy attorney?

They paid the bankruptcy attorney directly.
And that was before you filed the bankruptcy?
That was required in order to file, yes ma’am.

So it would have all happened before you filed?

> OF 2

The vehicle was just picked up and taken to their facility
and they maintained property [sic] control of it.

38. Under the New Car Custody Program as described by Chern, a “qualifying”
vehicle was one with no equity. Thus, Ms. Pfeiffer knew or should have known that the Vehicle,

like any “qualifying” vehicle, was subject to an existing security interest. Nevertheless, Ms.


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Sperro, LLC, but rather, entered into the TSSA for the sole purpose of having Sperro, LLC pay for
the Debtor's legal fees and costs associated with filing of the instant Chapter 7 Petition. The
Debtor’s voluntary transfer of possession of NFCU’s collateral pursuant to the TSSA was done
with no intention of paying any of the fees and costs agreed to him in the TSSA, and with no
intention of recovering the Vehicle. The Debtor’s intentional transfer of possession of NFCU’s
collateral pursuant to the TSSA was done with reckless disregard of the injury he would cause to
NFCU by surrendering possession of NFCU’s collateral. Likewise, the Debtor’s willful transfer of
possession of NFCU’s collateral pursuant to the TSSA was done with reckless disregard to the
warranties and promises he made to NFCU in the Note, Agreement and Disclosure. Namely, the
Debtor willfully gave possession of NFCU’s collateral to Sperro, LLC in violation of his promises
“to defend the collateral against claims and demands of other persons,” and “to not knowingly
permit any other liens to the attached collateral or permit any action to impair its present value.”
See Exhibit |. Moreover, the Debtor willfully and intentionally entered into and signed the TSSA,
and willfully gave possession of NFCU’s collateral to Sperro, LLC, in violation of his promise to
“obtain written consent of Navy Federal prior to disposing of the collateral.” See Exhibit 1. The
Debtor's actions were willful and done with intent to hinder, delay, or defraud NFCU, and
therefore. his discharge should be denied pursuant to 11 U.S.C. § 727(a)(2)(A).

ANSWER: Paragraph 22 is a legal conclusion and requires no response. To the
extent an answer is required, the allegations contained in Paragraph 22 are neither admitted
or denied on the basis that Defendant does not have sufficient knowledge or information to

form a conclusion regarding their validity.
23. In light of these alleged facts and circumstances, NFCU submits that the Debtor's

discharge should be denied in accordance with 11 U.S.C. § 727(a)(5) as the Debtor has failed to
explain satisfactorily any loss of assets, namely the loss of the 2015 Toyota Tacoma. The Debtor's

explanation that this estate asset was voluntarily turned over to Sperro, LLC, without a legitimate
need for “wansportation and storage services” and in order for Sperro, LLC to pay for his legal fees
and costs is simply an unsatisfactory and unacceptable explanation for why the Debtor no longer

has possession of the 2015 Toyota Tacoma.

Edrie A, Pfeiffer 41791
Hampton Roads Legal Services
372 S. Independence Blvd,
Suite 109

Virginia Beach, VA 23452
(757) 340-3100


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30. A transcript of vehicle record issued by the Virginia Department of Motor
Vehicles on March 5, 2016 shows that the Vehicle was still titled in the debtor’s name as of that
date, with NFCU identified as lienholder.”

31. Sperro was aware or should have been aware of the existing security interest on
the Vehicle and was required to take steps to notify the creditor that it was in possession of the
vehicle. The funds generated by Sperro’s conversion of the Vehicle went to pay HRLS’ and Ms.
Pfeiffer’s fees for the debtor’s bankruptcy case, as well as to benefit Sperro. Upon information
and belief, notwithstanding its security interest, NFCU received no funds from Sperro’s
conversion of the Vehicle.’

32. According to the debtor’s answer to question 16 on his Statement of Financial
Affairs, Sperro paid HRLS at least $1,635.00 in December 2015.

33. According to his Statement of Financial Affairs, question 18, the debtor
transferred the Vehicle to Sperro in December, 2015. However, the debtor’s Schedule A/B, line
3.3, incorrectly indicates that the Vehicle was located at 5009 Jeanne St. in Virginia Beach on
the petition date.

34. According to the debtor’s Schedule D, line 2.2, the Vehicle, valued at $19,700,
secured a debt to NFCU in the amount of $49,996, leaving the unsecured portion of NFCU’s
claim to be $30,296.

35. The debtor’s schedules make clear that the debtor had no equity in the Vehicle at

the time of filing.

? The U.S. Trustee is unaware of whether Sperro actually sold the Vehicle. If it did, the DMV records do not reflect
the sale.

3 In fact, NFCU has filed a Complaint against the debtor arising from his transfer of the Vehicle to Sperro. See Navy
Federal Credit Union v. Hall, APN: 16-07024-SCS. In its Complaint, NFCU seeks denial of the debtor’s discharge
and a finding that his debt to NFCU is non-dischargeable. In his response, the debtor asserts numerous affirmative
defenses, including his reliance on the advice of counsel.

6


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Colloquy

THE COURT: But that doesn't mean it's -- that doesn't
mean it's acceptable. I mean, what could you possibly have
thought was the legitimate purpose to be achieved by
counseling -- assuming you did -- your client to basically
cause the removal of collateral from the jurisdiction and --
what I don't understand, how is this different from if you had
advised the debtor here to take the car and hide it in the
woods and not tell Navy Federal Credit Union where it was until
your fees were paid?

I mean, to be blunt, it's -- and again, I'm not using
it in the federal criminal sense, although that may be for
someone else to decide whether it's applicable or not -- but it
seems like it's nothing short of just law extortion, and I
can't -- I've thought about this a lot. I was so appalled when
I saw the pleadings to begin with. I've spent hours and hours
thinking, and I cannot think of any possible legitimacy that
would surround this scheme, for lack of a better term.

And the fact that you got something in the mail from
somebody that said it was okay, I'm just -- it's unfathomable
to me.

MS. PFEIFFER: Your Honor, I understand the Court's
concerns. I became aware of this program that was out there
quite some time ago. This company presented at the National
Association of Consumer Bankruptcy Attorneys Conference. They

were there over -- not this last one -- but a year ago at it,

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Document Page 8 of 92

of her privilege to practice before this Court, or permanent disbarment from practice before this
Court.

The Court will conduct a Preliminary Hearing on this Order to Show Cause on Thursday,
November 3, 2016, at 10:00 a.m. at the United States Bankruptcy Court, Courtroom 1, Fourth Floor,
600 Granby Street, Norfolk, Virginia 23510. The Court ORDERS Edrie A. Pfeiffer, Esquire, to
personally appear at the Preliminary Hearing for the purpose of scheduling a Final Hearing, at which
Ms. Pfeiffer is ORDERED to show cause why, as a result of the actions detailed herein, (1) her
actions do not violate Virginia Rules of Professional Conduct 1.1, 1.2(c), 8.4(b), and 8.4(c); (2) she
should not be held in contempt; and (3) appropriate sanctions should not be assessed against her,
including, but not limited to, imposition of a monetary fine, suspension of her privilege to practice
before this Court, or permanent disbarment from practice before this Court.

The Court further ORDERS that the Clerk’s Office is directed to open a miscellaneous
proceeding on this matter.

The Clerk shall deliver a copy of this Order to Edrie A. Pfeiffer, Esquire, Hampton Roads
Legal Services, 372 South Independence Boulevard, Suite 109, Virginia Beach, Virginia 23452, by
certified mail, return receipt requested, as well as electronically through the Court’s Bankruptcy
Noticing Center. The Clerk shall also mail a copy of this Order to Brett Bud Hall, 1811 Craven

Drive, Seffner, Florida 33584; Kenneth N. Whitehurst, III, Esquire,Assistant United States Trustee;

and Anastasia Kezman, Esquire.
IT IS SO ORDERED.
Entered: September 27, 2016

Chi€f United States Bankruptcy Judge

Entered on Docket: September 27, 2016


CERTIFICATE OF TITLE FOR A VEHICLE

KEEP IN SAFE PLACE - ANY ALTERATION OR ERASURE VOIDS THIS TITLE

JHE DEPARTMENT OF MOTOR VEHIGLES, COMMONWEALTH OF VIRGINIA, HEREBY CERTIFIES THAT AN APPLICATION FOR A CERTIFICATE OF THLE NAS BEEN MADE FOR THE VEHI
HEREON PURSUANT TO THE PROVISIONS OF THE MOTOR VEHICLE LAWS OF THIS COMMONWEALTH, THAT THE APPLICANT NAMED ON THE FACE HEREON HAS BEEN DULY
THE LAWFUL OWNER OF SAID VEHICLE, AND THAT, FROM THE STATEMENTS, OF THE OWNER AND THE RECORDS ON FILE WITH THIS DEPARTMENT, THE HEHEQN DESC
E SECURITY INTEREST REGORDS ON FILE WITH THIS DEPARTMENT, AND AS DESCRIBED HEREON, IF ANY. THE MOTOR VEHICLE LAWS OF THIS COMMONWEALTH ALSO PRO\
THLE AND REGISTRATION INFORMATION IN THE OFFIGE OF THE DEPARTMENT OF MOTOR VEHICLES 15 PRIVILEGED AND ONLY SURJECT TO DISSEMINATION TO AUTHOR
HUSINESS ORGANIZATIONS OR AGENTS, GOVERNMENTAL ENTITIES AND INDIVIDUALS UNDER THE CONDITIONS SPECIFIED BY MOTOR VEHIOLE CODE SECTIONS 46 2-208, 46.2-208
10.

ESTABLISHED 04/29/15 294 BLT45 ORIGINAL
VEHICLE IDENTIFICATION NO. YEAR MAKE VEHICLE BODY TITLE NO. © i
| STRUUSENBPX133820 2015 TOYOTA PICKUP 61550130

EMPTY WGT. GROSS WGT. GVWR GCWR = AXLES. FUEL SALES TAX PAID... ODOMETER DATE ISSUED

4031 5000 6000 2) GAS 1324.27 *000002* 03/08/16
DAT ODOMETER BRAND PRION TITLE NO.
ACTUAL

OTHER PERTINENT DATA
00273

OESUY" FEDERAL CREDIT UNION TS NOTA TRCE ROE
390505445

PO BOK 25109 G30SO054 15

LEHIGH VARLEY PA 180021

INTEREST IW THE ABOVE DESCRIOED VEWICLE 1S HEREBY ARLE

aaualiv

Nanle(s) and addresales) of vehicle owners:

HALL, BRETT BUD

1575 GATOR BLVD STE 243
VIRGINIA BEACH VA 23459-8739

as

Federal and Slate law requires that you state the mileage in connection with the transfer of ownership. Failure to complate oF providing a fais statement may result in fines andor imprtsoninent,
‘The undersigned hereby certifies that the vehlele described in this title has been transferred! to the following (printed namo and address of 8uyer(s). i

Buyer(s). Namo

Sueot City, State, Zip
| certify to the best of my knowledge that the odometer reading isif_]ACTUAL. Mileage CJNOT ACTUAL Mileage pate oF SALE.
(odometer cisorepancy) [JIN EXCESS of Mechanical Limits (J Model year's 10 yaars or older and was exempt MN

ODOMETER FEADING Irom odometer disciosure In prior state ol ttle (applicant must present out-of-state te showing exemption) anceps t_ i

>

‘Signature of Seller(s) Printed Name of Seller(s)

Signature of Buyer(s) Printed Name of Buyer(s)
Tam aware of the above odometer certification made by the Seller(s)

4
Tam aware of the above odometer ceriificailon aus by Une Setler(s)
Dealer's No.

'* ASSIGNMENT OF TITLE BY OWNER:
© NOTIFY DMV WHEN VEHICLE IS SOLD «

f O81Z@Z VA VNNATA

SLNOW ANVAdIL *NLLV

a NITIO1 078

*NOINN LIGHYD IWATA AAVN 0/9
NOINA LIG3YD Tvuadad AAVN

\

HOI

2199


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CERTIFICATION

I, Penina Wolicki, the court approved transcriber, do
hereby certify the foregoing is a true and correct transcript
from the official electronic sound recording of the proceedings

in the above-entitled matter.

Pemunen WAL ale!
September 11, 2016

PENINA WOLICKI DATE

AAERT Certified Electronic Transcriber CET**D-569

eScribers, LLC | (973) 406-2250
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23



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SEEN AND NO OBJECTION:

/s/ Kenneth N. Whitehurst
Kenneth N. Whitehurst, III
Assistant United States Trustee

CERTIF. F ENDORSE

Thereby certify that a true copy of the foregoing Order has been endorsed by all
necessary parties as required by Rule 9022 who are as follows: Anastasia P. Kezman, Esq.,
Edrie Pfeiffer, Esq., and Kenneth Whitehurst, III, the Assistant United States Trustee.

/s/ Anastasia Kezman
Anastasia Kezman, Plaintiff's counsel

Anastasia Kezman, Esq.
VSB#33325

Deborah Kirkpatrick, P.C.

Post Office Box 10275

Virginia Beach, VA 23450-0275

Ph: (757) 343-3869; Fax: (757) 233-0275
Anastasiak O@cox.net
Counsel for Navy Federal Credit Union



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Colloquy
dealing with was not. But I -- you know, I don't know what
else I can say to this Court other than I have cooperated fully
with the U.S. Trustee on this. I've cooperated with Navy
Federal on this, and I will continue to do so.

THE COURT: All right. Anything further from anyone?

All right. I will reluctantly grant the motion for
settlement. While I think it is perhaps the minimum that I
would approve, given the nature of the proceeding, the concerns
that whether or not the impact of what occurred should fall so
heavily on the shoulders of the debtor, and given, frankly, the
willingness of Navy Federal to accept the proffered amount as
responsive to their losses, again, I will reluctantly approve
it.

I will -- let me ask you, Mr. Whitehurst: exactly how
did your proposed order elect to dispose of your motion? Was
it dismissal?

MR. WHITEHURST: No, actually, Your Honor. If I could
hand up -- I have copies for the Court.

THE COURT: All right. So would you hand it to the
Marshal?

MR. WHITEHURST: Your Honor, we actually went through
and agreed upon a number of facts necessary for the Court to
reach the conclusion that the motion should be granted,
including findings that basically all of the things we alleged

that were relevant to the concerns the Court have --

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Case 16-00703-SCS

Case hE CHER ROT,

Doc 2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
Doc 44 Détledh @A(12/ hag & ete re1co99/12/16 12:08:10 Desc Main

Case No. 16-70486-scs Document Page 26 of 29 September 8, 2016
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Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
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oa An un

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Document Page 3 of 29
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stage -- but it seems egregious.

MS. KEZMAN: Your Honor, I would agree it was
egregious, absolutely, which was why we filed the complaint to
begin with. And as facts developed, we -- as you saw from the
pleadings -- we did locate the vehicle. It was extremely
difficult, but we did locate the vehicle. Navy Federal does
have it in its possession now. They were able to sell it.

The settlement -- we focused on, again, trying to
appease the U.S. Trustee as well -- we focused on we've got the
vehicle back; now we want to make Navy Federal as whole as
possible. We didn't quite get there, and if the Court -- that
would be, in my opinion, a place where the Court could change
the amount of money that was paid to Navy Federal. But again,
it comes down to litigation costs.

Navy Federal did get the vehicle back. The debtor's
counsel did pay for the cost of getting -- paid Hix Towing,
which was the towing company in Chicago -- or in Indianapolis
that had the vehicle, paid a portion of our legal fees. Navy
Federal still is out a portion of the legal fees to try this
matter. But we were looking at the litigation.

And if you take into account that perhaps the debtor
was counseled improperly by debtor's counsel -- again, we
didn't get into that. We'd have to get into litigation: how
much did the debtor know? How much was the debtor involved?

Did the debtor rely on debtor's counsel's advice? Did he ask

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Case 16-00703-SCS Doc > Filed 002/110 Entered 09/27/16 15:02:18 Desc Main
Case 16-70486-SCS Doc 3BQcumiet 07/2206 3€at@ad 07/22/16 16:22:46 Desc
Exhibit(s) A Page 2 of 2

Sincerely,

Kevin Chern

Managing Partner

UpRight Law / Allen Chern Law
79 W. Monroe Street, 5th Floor
Chicago, IL 60603
chernesq@gmail.com

T: 312-899-6175

F; 844-339-2926
www.UpRightLaw.com

Twitter: @kevinchern

. E
www.linkedin.com/company/upright-law
www. facebook.con/UpRightLaw
httos://twitter.com/uprightlaw



Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
Case 16-70486-SCS Doc 44 Déilenh@0112/Fagé im@reid009/12/16 12:08:10 Desc Main

a aA Ho ®F YW ND BR

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THE COURT: Excuse me.

MR. WHITEHURST: -- me is of course, does the U.S.
Trustee accept the dismissal of the 727 case on these terms.
And she does, because I've spoken with Ms. Pfeiffer about this
matter, and I'm convinced that the debtor did this because he
was advised to by his attorney. And while there is case law
that suggests that he still has responsibility for what he's
done -- and I think he does -- he is, I think, a Marine, and
he's been retransferred to Florida, and he clearly didn't care
about the car, because he knew it was underwater, and his
lawyer told him it was a good deal. And the U.S. Trustee
doesn't want to proceed on a 727 case on those facts.

And so we would -- we would ask the Court to approve
the settlement as drafted, including the consent order that
I've submitted to the Court. I brought a copy of it. It
hasn't been entered, but we did electronically submit a consent
order in the matter that the U.S. Trustee has filed as well, if
you'd like me to hand that up? It's the same one that we
submitted electronically.

THE COURT: All right, thank you, sir.

All right. Anything further from anyone?

MS. PFEIFFER: Your Honor, I just would like to say,
I've practiced before this court for almost twenty years, all
of it during Your Honor's tenure before this Court. I've never

ever been accused of anything unethical. And I never -- I

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16



Case 16- 16- a SCS ee aa ena Entered. eee 6 13:02:18, esc Main

See ent) Tra Transporting a@wb@tonage A\ greement Page 1 of3
EXHIBIT B
Transporting and Storage Authorization Agreement

This TRANSPORTING AND STORAGE AUTHORIZATION AGREEMENT (the “Agreement’) is antered into on the

iL day of _DEceme#o9 1S” by and between Brett B (de (‘Owner’) whose address is
Soot JEANE ST, Virgins Gench,W& 25442 and Sperro LLC, an Indiana limited liability company
whose address is P.O. Box 163, Camby, Indiana 46113 (‘Sperro’). Ts 7- 305 =?) my

THE VEHICLE(S). Sperro agrees to take possession of, transport, and provide storage on a daily basis of the below-
described vehicle(s) in either of its secure outdoor storage facilitles located at 2534 Bluff Road, Indianapolis, Indiana
46225 and 2334 South California Street, Indianapolis, indiana 46225 (\he “Facilities”). Owner represents and
warrants that he/she/it is anfhe owner of the below-described vehicle(s) (the “Vehicle(s)") and is authorized to
execute and enter into this Agreement.

Year 20'S make TOXCTTM Mowe THCOMTM vine GT FUUY EN BFK1.33 328

PROOF OF OWNERSHIP AND PERMISSION. Upon execution of this Agreement, Owner shall provide Sparro
satisfactory proof of ownership of the Vehicle(s). Further, if any person other than the registered owner(s) of the
Vehicle(s) is authorizing the transport and/or storage of the Vehicle(s), Sperro shall be provided with satisfactory
proof of written permission from the registered owner(s) of the Vehicle(s) that such person is authorized to enter into
this Agreement. The form of such written permission shall be satisfactory to Sperro, at its sole discretion, and shall
include, but not be limited to, a notarized writing signed by the registered owner(s) of the Vehicle(s) along with
satisfactory proof of ownership.

AUTHORIZATION OF TRANSPORT. By entering into this Agreement, Sperro is authorized to transport the
Vehicle(s) from point of origin to the Facilities. Owner acknowledges, accepts and agrees that in addition to the
transportation fee of $1.85 per mile from the point of origin to the Facilities, there is a $75.00 load fee and a $75.00
unload fee per Vehicle as well as a one-time key charge fee of $175.00 and a one-time facility Insurance fee of
$250.00. These transportation-related fees are nonnegotiable and subject to change by Sperro without prior notice,

AUTHORIZATION OF STORAGE. The Vehicle(s) will be stored outdoors, in a secured facility located at either 2534
Bluff Road, Indianapolis, Indiana 46225 or 2334 South Califomia Street, indianapolis, Indiana 46225, on a day-to-day
basis. Owner acknowledges, accepts and agrees to the daily storage fee of $45.00 per day which will begin as of the
date that he/she/it enters into this Agreement and shall continue for so long as Sperro Is in possession of the
Vehicle(s).

PAYMENT OF FEES. Ali transportation-related fees and the first ten (10) days of storage fees (the “Initial Fees") are
due and payable on the tenth (10") day following Sperro's possession of the Vehicle(s), without the necessity of
invoicing. Failure to pay the Initial Fees by the fifteenth (15) day following Sperro's possession of the Vehicle(s)
shall result in Owner being declared in default of this Agreement and shall subject the Vehicle(s) to mechanic's lien
foreclosure proceedings as discussed below. After payment of the Initial Fees, any additional storage fees shall be
immediately due upon invoicing by Sperro.

CONDITION OF VEHICLE(S). Spero agrees to keep the Vehicle(s) in as good condition as iv/they was/were in
when received from Owner and to deliver the Vehicle(s) to Owner at the termination of this Agreement in that same
condition (with the exception of any mileage added to the Vehicle(s) during transport), normal wear and tear
excepted. The purpose of this Agreement is only for the transportation and storage of the Vehicie(s). Owner may not
use the Facilities for any other purpose including, without limitation, the storage of anything other than the Vehicle(s)
and/or the maintenance or servicing of the Vehicle(s).

DEFAULT. Owner shall be in default of thia Agreement if Owner fails to pay any fees arising hereunder when due or
defaults on any other term or condition of this Agreement. Default shall subject the Vehicle(s) to mechanic's tlen sale
proceedings pursuant to the Indiana Civil Code. Such lien sale proceedings shall include the recovery of, but not be
limited to, lien sale processing and collections charges not to exceed the maximum amount allowed by law, but in no
event less than $35.00 or more than $550.00 at the time lien sale notification documents are deposited in the U.S.
Mail. Owner understands that if any fees due hereunder are not paid when due, Sperro is granted an express
security interest in the Vehicle(s) in addition to the statutory mechanic's lien afforded to Sperro under Indiana law. In
the event Owner defaults under this Agreement and/or abandons the Vehicle(s) at the Facilitles, Sperro shall be
entitled to a $175.00 administrative fee. Should Sperro have to retain a third-party collection agent to recover any
sums due hereunder, Owner shall be responsible for all costs of collection, including any applicable attorneys’ fees.

1 of 2


Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
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Document Page 2 of 6

The parties agree, and the Court makes the following finding of facts:

1. Brett Bud Hall (“Debtor”) filed a petition for bankruptcy relief on February
17, 2016.

2. The Court has jurisdiction over this matter pursuant to 28 U.S.C.§§ 157 and
1334 and 11 U.S.C.§§ 727 and 523 and Federal Rule of Bankruptcy Procedure 7001. This
is a core proceeding within the meaning of 28 U.S.C.§157(b).

5. Venue is proper pursuant to 28 U.S.C.§ 1409(a).

4. NFCU is the holder of a Promissory Note, Security Agreement and
Disclosure in the original amount of $53,186.49, secured by a lien on a 2015 Toyota
Tacoma, VIN: 5TFUU4EN8FX133820 (“Vehicle”).

5. The Vehicle at all times since the origination of the Note has
been fully encumbered by NFCU’s lien. Since the Debtor obtained possession of
the Vehicle, there has never been any equity in the Vehicle for the benefit of the
Debtor.

6. Prior to filing of the instant bankruptcy petition, the Debtor defaulted
on the Note. As of the filing date, the payoff on the Note was $50,343.84 and the
arrears were $1,821.56.

7. On December 11, 2015, on the advice of counsel, the Debtor entered
into and signed a Transporting and Storage Authorization Agreement (“TSSA”)
with Sperro, LLC, in exchange for Sperro, LLC’s payment of Debtor’s bankruptcy
fees directly to Debtor’s counsel.

8. In December 2015, the Debtor transferred possession of the collateral
to Sperro, LLC.

9. In December, 2015, Sperro, LLC paid Hampton Roads Legal

services $1,835.00.


Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main

Case 16-70486-SCS Doc 32 Dequment22/1BageAB1ebIP7/22/16 16:22:46 Desc Main
Document Page 3 of 10

-At time of surrender of vehicle to Sperro, Client signs a towing,
storage and custody agreement with Sperro. . .Sperro charges
customary and reasonable fees for these services. . .

-UpRight notifies the finance company. . that Sperro has custody
of the vehicle. . .and they should recover the vehicle as soon as
possible to avoid excessive storage fees.

Benefits to Client:

-Immediately upon placing the vehicle in Sperro’s custody, Sperro
will remit the entire legal fee plus filing fee to UpRight Law on
client’s behalf. . .

11. On information and belief, debtors with “qualifying” vehicles (i.e., vehicles with
no equity) are advised to enter the New Car Custody Program emphasizing that their bankruptcy
legal fees would be paid. Prospective debtors who participated in the New Car Custody Program
were directed to surrender their vehicle to Sperro and to incur new debt by signing Sperro’s
towing and storage agreement.

12. On information and belief, after the towing and storage contract is signed, Sperro
takes possession of the prospective debtor’s vehicle and transports it to a storage facility owned
by Sperro, located in Indiana.

13. Sperro charges inflated fees for towing and storage designed to permit it to assert
a lien large enough to cover the debtor’s attorney and filing fees plus an additional amount to
benefit Sperro.

14. After the debtor fails to pay the charges, Sperro asserts a lien against the vehicle
and purports to exercise its lien rights to conduct an auction of the vehicle to obtain title to the
vehicle.

15. Sperro pays debtor’s counsel the fees and costs the prospective debtor agreed to

pay for a bankruptcy case and, on information and belief, retains the rest of the proceeds.


Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
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Document Page 5of6

Credit Union, P.O. Box 3502, Merrifield VA 22119, and the cashier’s check shall be sent
to NFCU c/o Anastasia Kezman, Esq. P.O. 10275, Virginia Beach, VA 23450-0275.

IT IS FURTHER ORDERED that upon NFCU’s receipt of the agreed payment,
Plaintiffs counsel will submit for entry an order dismissing this complaint, Adversary
Proceeding No. 16-07024.

IT IS FURTHER ORDERED that the Debtor has been advised of the terms of
this Order and is in full agreement and has a full understanding of these terms, as
evidenced by his counsel’s signature below.

IT IS FURTHER ORDERED that a copy of this Order be transmitted to Anastasia
P. Kezman, Esq., P.O. Box 10275, Virginia Beach, VA 23450-0275; Edrie Pfeiffer, 372 S.
Independence Blvd., Suite 109, Virginia Beach, VA 23452, to Kenneth N. Whitehurst, Ill,
Assistant United States Trustee, 200 Granby Street, Room 625, Norfolk, Virginia 23510,
Carolyn Camardo, 5101 Cleveland St. Suite 200, Virginia beach, VA 23462, and to the
Debtor, 1811 Craven Dr., Seffner, FL 33584.

ENTER: This day of

/s/ Stephen C. St.John Sep 15 2016

Chief Judge Stephen C. St. John
United States Bankruptcy Court
Eastern District of Virginia

At: — Norfolk, Virginia

1 ASK FOR THIS:

/s/ Anastasia P. Kezman Entered on Docket:9/19/16
Anastasia P. Kezman, Esq., Counsel for

Navy Federal Credit Union

SEEN AND AGREED:

/s/ Edrie Pfeiffer
Edrie Pfeiffer, Esq. Debtor’s counsel



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the right questions to determine if he could rely on that
advice? But then that becomes an issue of expense to Navy
Federal, and I'm not sure they were willing to pay for that,
since they got the vehicle back.

So again, we were trying -- my focus was on trying to
make Navy Federal whole. I do agree that the situation was
egregious.

THE COURT: Ms. Pfeiffer, I have to start with you,
much as my colleague Judge Santoro started when he was still
unanointed, asking one of his clients who'd done something
amazingly inappropriate: what were you thinking?

MS. PFEIFFER: Your Honor --

THE COURT: How -- Ms. Kezman, let me just finish the
preface.

THE COURT: Again, facially, this is one of the worst
things I think I have ever seen. And I'm not just going to
limit it to twenty-one years on the bench. I'm going to throw
in the first eighteen years when I was practicing. What
possible legitimate purpose did this scheme serve?

MS. PFEIFFER: Your Honor, this was a program that had
been in existence for quite some time before I --

THE COURT: Well --

MS. PFEIFFER: -- did --

THE COURT: -- so is armed robbery.

MS. PFEIFFER: Well --

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Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
Document Page 4 of 92

$4,000.00, representing attorney fees of $1,500.00 that Ms. Pfeiffer received from Sperro;
reimbursement of the storage expense; and payment for a portion of the attorney fees that NFCU
incurred. Upon payment of this sum, NFCU agreed to dismiss the Complaint against Mr. Hall. Ms.
Pfeiffer likewise agreed to entry ofa consent order granting the Motion to Examine, based upon the
terms of the settlement reached with NFCU.

Ms. Pfeiffer; Anastasia Kezman, counsel for NFCU; and Kenneth N. Whitehurst, III,
Assistant United States Trustee, appeared at the hearings held on September 8, 2016. For the
reasons stated on the record from the bench, the Court granted both motions, as set forth in the
Consent Order in Settlement of Navy Federal Credit Union’s Complaint Objecting to the Debtor’s
Discharge and Dischargeability of Debt, entered September 19, 2016,° and the Consent Order
Granting the Motion to Examine Debtor’s Transactions with His Attorney and for Disgorgement of
Paid Fees Pursuant to 11 U.S.C. § 329, entered September 8, 2016 (collectively, “the Orders”). The
Orders contain several factual admissions in support of the above facts. Accordingly, the Court
hereby incorporates by reference both Orders, copies of which are annexed to this Order as
Attachment D and Attachment E, respectively. The Court also incorporates by reference the
transcript of the September 8, 2016 hearings, annexed hereto as Attachment F.

In the order memorializing the settlement with NFCU, Ms. Pfeiffer agreed that Mr. Hall
undertook his actions and engaged in the transaction with Sperro based upon her advice. Consent
Order in Settlement of Navy Federal Credit Union’s Complaint Objecting to the Debtor’s Discharge

and Dischargeability of Debt, entered September 19, 2016, at] 7. Ms. Pfeiffer further admitted that

5 The identical order approving the settlement between NFCU and Ms. Pfeiffer was
entered in the Adversary Proceeding on September 16, 2016.

4


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Document Page 5 of 11

to pay for Mr. Hall’s Bankruptcy” in December 2015.

ANSWER: Document speaks for itself.

17. Official Form 108, “Statement of Financial Affairs for Individuals Filing for
Bankruptcy” signed under penalty of perjury by the Debtor, Under Par 1, after the Debtor
identifies NFCU as the creditor that has a secured claim on the 2015 Toyota Tacoma, the Debtor
then indicates that he intends to surrender this collateral, which is currently located at “5009 Jeanne
St., Virginia Beach, VA 23462.” Contrary to this disclosure, upon information and belief, the
collateral is not located at 5009 Jeanne St., Virginia Beach, VA 23462, and the Debtor did not
surrender the property to NFCU, Instead, the Debtor willfully and intentionally transferred
possession of the collateral to Sperro, LLC approximately two months prior to the filing of the
instance case, and the Vehicle was transferred to Michigan by Sperro, LLC pursuant to the TSSA
that the Debtor signed on December 15, 2016. This transfer was made to the detriment of NFCU
and its interest in the Vehicle.

ANSWER: Denied in part, admitted in part. Official Form 108 is not the Statement

of Financial Affairs but the Statement of Intention for Individuals filing under Chapter 7.

Admitted that this form listed the pro

23462. The remainder is a legal conclusion and requires no response. To the extent an
answer is required, the allegations contained in Paragraph 17 are neither admitted not

denied on the basis that the Defendant does not have sufficient knowledge or information to
form a conclusion regarding their validity.

18. Prior to the removal of the Vehicle from the state of Virginia, NECU was unaware of
the existence of the TSSA and of the transfer of the Vehicle from the Debtor's possession to
Sperro, LLC. and its transportation to the State of Michigan.

ANSWER: Neither admitted nor denied on the basis that Defendant does not have
sufficient knowledge or information to form a conclusion regarding the validity of this

allegation.
19. Atno time did NFCU consent to the terms and conditions of the TSSA or to the
transfer of the Vehicle into the possession of Sperro, LLC, or to the transfer of the Vehicle to the

Edrie A. Pteiffer 41791
Hampton Roads Legal Services
372 S. Independence Blvd.
Suite 109

Virginia Beach, VA 23452
(757) 340-3100


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Document Page 3 of 11

ANSWER: Neither admitted nor denied on the basis that Defendant does not have

sufficient knowledge or information to form a conclusion re;

allegation.
9. The Vehicle at all times since the origination of the Note has been fully encumbered by

NFCU’s lien. Since the Debtor obtained possession of the Vehicle, there has never been any
equity in the Vehicle for the benefit of the Debtor.
ANSWER: Neither admitted nor denied on the basis that Defendant does not have

sufficient knowledge or information to form a conclusion regarding the validity of thi

allegation.
10. Prior to filing of the instant bankruptcy petition, the Debtor defaulted on the Note. As
of the filing date, the payoff on the Note was $50,343.84 and the arrears were $1,821.56.
ANSWER: Neither admitted nor denied on the basis that Defendant does not have
sufficient knowledge or information to form a conclusion regarding the validity of this

allegation.
(1, Upon information and belief, the Debtor met and conferred with his bankruptcy

counsel on or before December 2015.
ANSWER: ADMITTED
12. Upon information and belief, the Debtor, either directly or through counsel, contacted

Sperro, LLC, a towing company, to negotiate the payment of Debtor’s legal fees and costs
associated with the filing of Debtor’s bankruptcy petition.

ANSWER: DENIED

13. On December 11, 2015, the Debtor willfully and intentionally entered into and signed

a Transporting and Storage Authorization Agreement (“TSSA”) with Sperro, LLC, in exchange for
Sperro, LLC’s payment of Debtor’s bankruptcy fees directly to Debtor’s counsel. Pursuant to the
TSSA, the Debtor also agreed to pay the following: a $75.00 vehicle load and a $75.00 vehicle
unload fee: a charge of $1.85 per mile to tow the Vehicle to Indiana from Virginia; a daily storage
fee of $45.00 per day; a one-time key charge fee of $175.00 and a one time facility insurance fee of

Edrie A. Pfeiffer 41791
Hampton Roads Legal Services
372 S. Independence Blvd.
Suite 109

Virginia Beach, VA 23452
(757) 340-3100


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Colloquy

found out that he had changed his practices. But
unfortunately, at that point, we had already entered into the
agreement with them. There was no attempt to hide this
vehicle. It was disclosed -- there was a change to the forms.
The old forms that we used up until December didn't have the
location of the vehicle. I was not aware, before the forms
changed, that that changed. And so there was that error on his
paperwork that indicated he had possession of the vehicle.

We certainly never intended to do that. We disclosed
in the paperwork that this vehicle was transferred. We
disclosed that they paid the fees. We were trying to be as up-
board and up-front as I could in this disclosure with -- in
accordance with what the practices had been.

There were benefits to the debtor for it. On my side
of the practice, one of the problems that debtors have is not
knowing when collateral is going to be taken, and it can create
a burden. In my client's case, he did have a burden because he
couldn't afford this vehicle; he wasn't able to store it; and
so there was a benefit to him to have it securely maintained
for it.

I understand the Court's concerns. This company did
turn out to be, unfortunately at the end of last year, 2015 and
into this -- the first part of this year. And you know, the
guy's in jail --

THE COURT: Well, let me interrupt you --

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defraud NFCU, and therefore, his discharge should be denied pursuant to 11
U.S.C.§ 727(a)(2)(A).

23. In light of these alleged facts and circumstances, NFCU submits that
the Debtor’s discharge should be denied in accordance with 11 U.S.C. § 727 (a)(5) as the
Debtor has failed to explain satisfactorily any loss of assets, namely the loss of the 2015
Toyota Tacoma. The Debtor’s explanation that this estate asset was voluntarily turned
over to Sperro, LLC, without a legitimate need for “transportation and storage services”
and in order for Sperro, LLC to pay for his legal fees and costs is simply an
unsatisfactory and unacceptable explanation for why the Debtor no longer has possession
of the 2015 Toyota Tacoma.

24. In light of these alleged facts and circumstances, NFCU submits that
the debt owed to it in the amount of $50,343.84 should be declared non-dischargeable
pursuant to 11 U.S.C. § 523(a)(6), for willful and malicious injury to NFCU by the
Debtor. Contrary to the warranties made by the Debtor in the Note, Agreement
and Disclosure, NFCU submits that the Debtor knowingly and willfully disposed
of the collateral without the written consent of NFCU, knowingly and willfully
permitted an action to impair the collateral’s value to NFCU, knowingly and
willfully permitted the attachment of a fraudulent mechanic’s lien to the
collateral, and knowingly and willingly subjected the 2015 Tacoma to a possible
mechanics’ lien sale by Sperro, LLC.

25.  Asaresult of the Debtor’s voluntary and willful actions, NFCU has
been damaged in the principal amount of $50,343.84, plus accruing finance
charges and legal fees and cost. NFCU has suffered an injury and monetary damages
in that it can no longer obtain possession of its collateral in order to liquidate its value as
bargained for in the Note, Agreement and Disclosure.

26. The Debtor’s malice and reckless disregard for the injury sustained by
NFCU can be inferred from Debtor’s voluntary and willful actions, Namely, the Debtor

7


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Collateral. For example, even though the stay had already terminated by operation of
other provisions of the Bankruptcy Code, the Marion County Prosecutors’ Office still
required NFCU to file a motion for relief, obtain an order lifting the stay, and prepare a
notarized hold harmless letter, in order to gain possession of their collateral from the
Indiana State Police.

16. Upon learning of Debtor’s counsel action in this matter, the United States
Trustee filed a motion to Disgorge counsel’s fees, as said fees were obtained in exchange
for Sperro, LLC acquisition of NFCU’s collateral.

17. Taking responsibility for the actions of the Debtor, Debtor’s counsel has
agreed to reimburse Plaintiff for the storage expense of $1,660.00, as well as a portion of
Plaintiff's ’s legal fees and costs, for a total of $4,000.00. A portion of this amount shall
represent the improperly obtained fees that Debtor’s counsel received from Sperro, LLC in
exchange for the conversion of NFCU’s collateral. Debtor’s counsel will make a lump sum
payment by cashier’s check to Navy Federal Credit Union, P.O. Box 3502, Merrifield VA
22119, and the cashier’s check shall be sent to NFCU c/o Anastasia Kezman, Esq. P.O.
10275, Virginia Beach, VA 23450-0275.

18. Upon receipt of these funds that solely represent expenses incurred by
NECU to begin litigation of this complaint and to locate and secure its collateral, NFCU
agrees to dismiss this adversary complaint objecting to the Debtor’s discharge and to the
discharge-ability of NFCU’s debt.

19. Finding that all parties are in agreement as evidenced by counsels’
endorsements below, and finding that this settlement is in the best interest of all the parties,
and for good cause shown, it is:

ADJUDICATED AND ORDERED that in settlement of NFCU’s complaint,

Debtor’s counsel shall make a lump sum payment by cashier’s check to Navy Federal


-- Case 16-00703:SCS—Doc2~ Filed 09/27/16—Entered 09/27/1615:02:18 Desc Main !
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Document Page 4 of 4

PARTIES TO RECEIVE COPIES:
Brett Bud Hall

1811 Craven Drive

Seffner, FL 33584

Carolyn L. Camardo, Esq. (via email)
Edrie A. Pfeiffer, Esq. (via email)

Office of the U.S. Trustee (via email)


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Document Page 9 of 9

P.O. Box 10275
Virginia Beach, VA 23450
Anastasiak | O@cox.net

Ph: (757) 343-3869; Fax: (757) 233-0277

PROOF OF SERVICE

I hereby certify that a true copy of the foregoing Complaint to Object to the
Debtor’s Discharge and to Determine Dischargeability of Debt was transmitted
electronically to Debtor’s counsel, Edrie Pfeiffer, Esq., and to the Trustee, Carolyn
Camardo, and was mailed postage pre-paid to the Debtor at 5009 Jeanne St., Virginia
Beach, VA 23462.

/s/ Anastasia Kezman
Anastasia Kezman



Case 16-00703-SCS Doc2 Filed 09/27/16 Entered 09/27/16 15:02:18 Desc Main
Document Page 3 of 92

intentionally transferring possession of the Vehicle without its consent) and a determination that the
debt Mr. Hall owed to it was nondischargeable (as a result of his willful and malicious injury to the
credit union by permitting Sperro to attach a fraudulent mechanic’s lien to the Vehicle). Mr. Hall,
by Ms. Pfeiffer, filed an answer to the Complaint on June 14, 2016, in which he asserted, as an
affirmative defense, that he engaged in the transaction with Sperro based upon his reliance on Ms.
Pfeiffer’s advice to do so. Answer to Complaint, filed June 14, 2016, at 10. The Answer to the
Complaint is attached to this Order as Attachment C.

The United States Trustee’s Motion to Examine requested that the Court examine Mr. Hall’s
transactions with Ms. Pfeiffer and determine whether the compensation Ms. Pfeiffer received
exceeded the reasonable value of the services she provided to Mr. Hall. The United States Trustee
also requested that the Court order Ms. Pfeiffer to return the legal fees paid to her by Sperro to Mr.
Hall or, in the alternative, the bankruptcy estate. Finally, the United States Trustee requested that
the Court cancel any fee agreement between Mr. Hall or Sperro and Ms. Pfeiffer or her law firm.

After the Court established a trial date for the Complaint, counsel for NFCU located the
Vehicle, which was in the possession of the Indiana State Police,’ and secured its release upon the
credit union’s payment of $1,660.00 for storage fees. NFCU and Ms. Pfeiffer then reached a
settlement, whereby Ms. Pfeiffer, “[t]aking responsibility for the actions of the Debtor,” (see
Consent Order in Settlement of Navy Federal Credit Union’s Complaint Objecting to the Debtor’s

Discharge and Dischargeability of Debt, entered September 19, 2016, at § 17) would pay NFCU

4 According to paragraph 14 of the Consent Order in Settlement of Navy Federal Credit
Union’s Complaint Objecting to the Debtor’s Discharge and Dischargeability of Debt, entered
September 19, 2016, “The Vehicle was picked up on July 11, 2016 from the Indiana State Police,
where it had [been] held after it had been seized from Sperro, LLC’s lot on March 1, 2016 as part
of a grand jury forfeiture subpoena against Sperro, LLC.”

3


=| S oc 2 “File ntere: 202: esc Main
Case 16-70486-SCS Doc 3Decumient 07/Pag6 3&atsed 07/22/16 16:22:46 Desc
Exhibit(s) A Page 1 of 2 EXHIBIT A
Edrie Pfeiffer
rc
From: Kevin Chern <chernesq@gmail.com>
Sent: Thursday, June 18, 2015 1:45 PM
To: partnerslist@uprightlaw.com
Subject: New Car Custody Program at UpRight Law - Read Carefully

Dear Valued Partners:

Over the last month, about 15% of our front end Senior Client Consultants have been offering a new program to clients as part of their
bankruptcy matters that allows a client to surrender a vehicle to a towing and storage facility and have the cost of their bankruptcy
case fully subsidized. This is how it works:

Qualifications:

-Client wants to file for Chapter 7 bankruptcy.

-Client has a vehicle, motorcycle, boat, truck or other property that the client is willing to surrender.
~The property intended to be surrendered has no equity.

-The property to be surrendered is worth greater than $5000.

Program Details:

~Client contacts Sperro LLC (Sperro), a towing and storage company, and arranges for Sperro to take custody of the debtor's property.
~At time of surrender of vehicle to Sperro, Client signs a towing, storage and custody agreement with Sperro whereby the client
contracts with Sperro to load the vehicle, tow it to a facility, store it and maintain it until such time as the finance company picks up
the vehicle. Sperro charges customary and reasonable fees for these services (e.g. $75 loading fee, $1,50 per mile towing, $45/day
storage, etc.).

-UpRight notifies the finance company by certified mail return receipt requested within a couple of days that Sperro has custody of the
vehicle, the location of the storage facility, contact information for Sperco and instructions that they should recover the vehicle as soon
as possible to avoid excessive storage fees,

Benefits to Client:

~Client can immediately cancel insurance on the vehicle.

~Client no longer has to maintain the vehicle,

~Client no longer has to bear the expense or inconvenience of plating or storing the vehicle.

-Client does not have to worry about the repo man showing up at client's home or work.

-Creditor can be directed to Sperro instead of fielding calls related to the recovery of the vehicle.

-Client does not have to be worried about issues related to finance companies who refuse to pick up the vehicle.

-Immediately upon placing the vehicle in Sperro's custody, Sperro will remit the entire legal fee plus filing fee to UpRight Law on
client's behalf.

Due Diligence

-Kevin Chern reviewed the program in detail with Felicia Burda, our UST Counsel, Mary Robinson, or Professional Responsibility
Counsel and David Leibowitz, General Counsel of UpRight Law and Head of Litigation.

-Performed background check on ownership of Spero.

-Rolled out program on a limited basis to test reaction of panel trustees, the UST and creditor/creditor counsel.

-Sperro is properly disclosed on the bankruptcy petition SOFA as the source of payment of client's legal fees.

During a welcome call, if a client says that they are arranging through us to surrender the car, this program is what they are referring
to. We feel that this program is ethical, legally compliant and affords debtors the ability to relieve themselves of the custody of a
vehicle they do not want and have their legal fees subsidized.

Please let me know if you have any questions or concerns or are interested in incorporating the Sperro vehicle custody program into
your own practice.


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don't know how many times I've told clients that my bar license
is not worth your disclosure or anything. I thought that this
program -- and after the research and investigation I'd done on
it, I thought that it did comply with all aspects of the law.

Yes, it was something that was extremely different
than anything that had been done before, but everything that I
showed, showed it had been used successfully for quite some
time throughout the country before I ever even attempted to get
involved with this.

And unfortunately, the individual that was running
this, he turned out to be quite a con artist, and there's -- I
know -- he's under criminal indictment now for it. I would
never have gone into this program if I were aware of the
sight -- the facts that came out after we'd already committed
to it. But I was -- I was very, very cautious in going into
this, and I really did step back for almost eighteen months
after I became aware of this program being out there, to see
how it was being handled. And all indications, at that point,
were that this was being used well throughout the country and
it was meeting all of the ethical requirements for it.

I would never have gone into anything that I thought
was in the least way unethical. And I know the Court has a
different view of it at this point. I just -- I can't --

THE COURT: That is an understatement, Ms. Pfeiffer.

MS. PFEIFFER: Yeah.

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UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF VIRGINIA

NORFOLK DIVISION Attachment B
In re: Case No. 16-70486-SCS
Chapter 7
Brett Bud Hall,
Debtor.

MOTION TO EXAMINE DEBTOR’S TRANSACTIONS WITH HIS ATTORNEY
AND FOR DISGORGEMENT OF PAID FEES PURSUANT TO 11 U.S.C. § 329
WITH SUPPORTING MEMORANDUM

Judy A. Robbins, United States Trustee for Region Four, by counsel, moves this Court to
examine the debtor’s transactions with Edrie Pfeiffer, Esq. and Garfinkel and Pfeiffer, P.C., dba
Hampton Roads Legal Services (“HRLS”), and order the return of all fees paid to HRLS by the
debtor or on her behalf. In support of her motion, the U.S. Trustee states:

JURISDICTION AND VENUE

1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 151, 157(a)
and 1334(a) and (b), and the General Order of Reference from the United States District Court
for the Eastern District of Virginia dated August 15, 1984. This is a core proceeding pursuant to
28 U.S.C. § 157(b)(2)(A).

2. Venue is proper in this Court pursuant to 28 U.S.C. § 1409.

FACTS

3. This case was commenced on February 17, 2016 by the filling of a voluntary
petition for protection under chapter 7 of the United States Bankruptcy Code.

4. Carolyn Camardo serves as chapter 7 trustee in this case.

Kenneth N. Whitehurst, III, Esq., AUST, VSB No. 48919

Cecelia Ann Weschler, Esq., VSB No. 28245

Nicholas S. Herron, Esq., NISB No. 03007-2008, PASB No. 208988
Office of the United States Trustee

200 Granby Street, Room 625

Norfolk, VA 23510

(757) 441-6012


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Document Page 2 of 92

Pfeiffer’s attorney fees for representing Mr. Hall in his bankruptcy case.’ The agreement required
Mr. Hall to pay certain towing and storage fees; if those fees were left unpaid, Sperro would place
a mechanic’s lien on the Vehicle and, ultimately, sell it to satisfy the lien. The Vehicle, however,
was already encumbered by a purchase money lien held by NFCU, on which Mr. Hall owed over
$50,000.00 at the time his bankruptcy case was filed, which amount far exceeded the value of the
Vehicle.

Following Ms. Pfeiffer’s advice, Mr. Hall entered into the agreement with Sperro, which
took possession of and transported the Vehicle from Virginia to Indiana in December 2015. Sperro
then paid Ms. Pfeiffer $1,835.00 (which included Mr. Hall’s $335.00 bankruptcy filing fee).
Disclosures on Mr. Hall’s Statement of Financial Affairs and Disclosure of Compensation of
Attorney for the Debtor, both filed with Mr. Hall’s bankruptcy petition on February 17, 2016,
confirm the transfer of the Vehicle to Sperro and the payment of $1,835.00 to Ms. Pfeiffer by
Sperro. Despite these representations, Mr. Hall’s bankruptcy schedules and his Statement of
Intention incorrectly stated that the Vehicle was still located in Virginia Beach, Virginia.’

NECU was unaware of Mr. Hall’s agreement with and transfer of the Vehicle to Sperro until
being so informed by the Chapter 7 Trustee after she conducted the Section 341 Meeting of
Creditors in March 2016. NFCU filed a Complaint on May 12, 2016, seeking the denial of Mr.

Hall’s discharge (on the basis that he sought to hinder, delay, and defraud the credit union by

2 Ms. Pfeiffer candidly admitted at the September 8, 2016 hearings that Mr. Hall became
aware of and engaged in the transaction with Sperro as a result of her advice and counsel.
Transcript of September 8, 2016 hearings, at 9.

3 Ms. Pfeiffer indicated at the September 8, 2016 hearings that “there was [an] error on
his paperwork that indicated he had possession of the [VJehicle.” Transcript of September 8,
2016 hearings, at 7.


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ANSWER: Paragraph 23 is a legal conclusion and _r

extent an answer is required, the allegations contained in Paragraph 23 are neither admitted
or denied on the basis that Defendant does not have sufficient knowledge or information to

form a conclusion regarding their validity.

24, In light of these alleged facts and circumstances, NFCU submits that the debt owed to
it in the amount of $50,343.84 should be declared non-dischargeable pursuant to 11 U.S.C. §
523(a)(6), for willful and malicious injury to NFCU by the Debtor. Contrary to the warranties
made by the Debtor in the Note, Agreement and Disclosure, NFCU submits that the Debtor
knowingly and willfully disposed of the collateral without the written consent of NFCU,
knowingly and willfully permitted an action to impair the collateral’s value to NFCU, knowingly
and willfully permitted the attachment of a fraudulent mechanic’s lien to the collateral, and
knowingly and willfully subjected the 2015 Tacoma to a possible mechanic’s lien sale by Sperro,
LLC.

ANSWER: Paragraph 24 is a legal conclusion and re no response. To the

extent an answer is required, the allegations contained in Paragraph 24 are neither admitte

or denied on the basis that Defendant does not have sufficient knowledge or information to

form a conclusion regarding their validity.
25, As «result of the Debtor’s voluntary and willful actions, NFCU has been damaged in

the principal amount of $50,343.84, plus accruing finance charges and legal fees and cost. NFCU
has suffered an injury and monetary damages in that it can no longer obtain possession of its

collateral in order to liquidate its value as bargained for in the Note, Agreement and Disclosure.

ANSWER: Neither admitted nor denied on the basis that Defendant does not have
sufficient knowledge or information to form a conclusion regarding the validity of this

allegation.
26. The Debtor’s malice and reckless disregard for the injury sustained by NFCU can be

inferred from the Debtor’s voluntary and willful actions. Namely, the Debtor willfully and
intentionally entered into a fraudulent scheme with Sperro, LLC to transfer possession of NFCU’s
collateral to Sperro, LLC by signing the TSSA, ,and then subsequently willfully and voluntarily

Edrie A, Pfeiffer 41791
Hampton Roads Legal Services
372 S. Independence Blvd.
Suite 109

Virginia Beach, VA 23452
(757) 340-3100


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is highly dependent on its attorney and therefore will be reluctant
to object to the fees of the attorney. In order to prevent
overreaching by an attorney, and provide protection to creditors,
section 329 requires that an attorney submit a statement of
compensation to be paid to enable the court to determine if the fees
are reasonable. Thus, section 329 establishes "an important and
valuable process that is statutorily mandated to insure that only
reasonable, necessary, beneficial professional services and fees are
charged against and paid by a prospective or prepetition debtor in
bankruptcy."

3 Lawrence P. King et al., COLLIER ON BANKRUPTCY 4 329.01, 329-4 to -5 (15th ed.

rev.1998).

“Absent compliance with the law, no professional has an absolute right to their fees.”
Soulisak, 227 B.R. at 82. Ms. Pfeiffer advised the debtor to participate in the Sperro “New Car
Custody Program.” She did so to enable the debtor to pay her the attorney’s fees needed to file
this bankruptcy case through ill-gotten proceeds of the Sperro scheme. As a result of her advice,
her client is now the defendant in an adversary proceeding filed by NFCU, seeking the denial of
his discharge and a determination that the debt he owes to NFCU is non-dischargeable because
of his participation in the Sperro scheme. But for Ms. Pfeiffer’s advice to participate in the
Sperro scheme, the debtor would not be forced to defend himself from the NFCU Complaint.

Ms. Pfeiffer’s fees are in excess of the reasonable value of the services she has provided
and are the fruits of the unlawful Sperro scheme. Any fee agreement between Ms. Pfeiffer or
HRLS and the debtor (or Sperro) in this case should be cancelled by this Court, and Ms. Pfieffer
and HRLS ordered to disgorge any fees collected, and barred from collecting any fees in this

case, for the reasons set forth above.*

* In most disgorgement cases, ill-gotten attorney’s fees are returned to the debtor. In this case, because the fees
appear to be the product of the improper conversion of the Vehicle, the Court should consider returning the fees to
the chapter 7 estate for distribution to the appropriate lienholder. To be clear, other than for the purposes of this
motion, the U.S. Trustee takes no position with respect to the validity or extent of NFCU’s lien, or the ultimate
validity of its Complaint against the debtor.


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UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF VIRGINIA ;
Norfolk Division Attachment C
IN RE: BRETT BUD HALL

CASE NO.: 16-70486 -SCS

DEBTOR. CHAPTER: 13
NAVY FEDERAL CREDIT UNION AP No.: 16-07024
PLAINTIFF,
Vv.
BRETT BUD HALL
DEFENDANT.
AND
CAROLYN CAMARDO
TRUSTEE

DEFENDANT'S ANSWER & AFFIRMATIVE DEFENSES TO PLAINTIFF'S

COMPLAINT OBJECTING TO THE DISCHARGE OF THE DEBTORS OR THE
DISCHARGEABILITY OF CERTAIN DEBTS

Defendant Brett Bud Hall, hereby referred to as the “Defendant”, for his answer to
Plaintiff's Complaint Objecting to Discharge and to Determine the Dischareability of Debt, state as
follows:

1. Brett Hall (“Debtor”) filed the instance case for bankruptcy relief on February 17, 2016.

ANSWER: ADMITTED

2. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and
11 U.S.C. §§ 727 and 523 and Federal Rule of Bankruptcy Procedure 7001. This is core
proceeding within the meaning of 28 U.S.C. § 137(b).

ANSWER: ADMITTED

Edrie A. Pfeiffer 41791
Hampton Roads Legal Services
372 S. Independence Blyd.
Suite 109

Virginia Beach, VA 23452
(757) 340-3100


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Document Page 4 of 10

Ms. Pfeiffer advises the debtor to utilize the “New Car Custody Program” to pay her fees.

16. Prior to filing his bankruptcy petition, the debtor owned three vehicles, including
a 2015 Toyota Tacoma (the “Vehicle”).

17. The Vehicle was collateral for a debt owed to Navy Federal Credit Union.
(“NFCU”).

18. On information and belief, the debtor sought advice from Ms. Pfeiffer about the
Vehicle and the debt to NFCU for which it served as collateral.

19. On information and belief, Ms. Pfeiffer advised the debtor that, under the “New
Car Custody Program,” Sperro would take the car, sell it, and use some of the proceeds to pay
the fees and expenses of the debtor’s chapter 7 bankruptcy filing.

20. On December 11, 2015, the debtor signed a Towing and Storage Authorization
Agreement from Sperro (the “Sperro Agreement”). A copy of the Sperro Agreement is filed
herewith as Exhibit B.

21. On information and belief, pursuant to the Sperro Agreement, the debtor, upon the
advice of Ms. Pfeiffer, incurred the following charges: $75.00 to load the car; $1.85 per mile to
tow the car from the debtor’s residence in Virginia Beach to Indianapolis, Indiana'; $75.00 to
unload the car; and $45.00 per day in storage charges. Pursuant to the Sperro Agreement, the
debtor agreed to indemnify, hold harmless, and defend Sperro from all claims, demands, actions
or causes of actions, including attorney’s fees and all costs.

22. Sperro’s services were completely unnecessary, except as a way to pay for the
debtor’s bankruptcy filing. Apart from the fact that Ms. Pfeiffer advised him to do so, the debtor
had no reason to enter into the Sperro Agreement other than to secure the payment of his
attorney’s fees.

' According to Google Maps, this is a distance of 726.6 miles, At $1.85 per mile, this totals $1,344.21.
4


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which is currently located at “5009 Jeanne St., Virginia Beach, VA 23462.”
Contrary to this disclosure, upon information and belief, the collateral is not
located at 5009 Jeanne St., Virginia Beach, VA 23462, and the Debtor did not
surrender the property to NFCU. Instead, the Debtor willfully and intentionally
transferred possession of the collateral to Sperro, LLC approximately two months
prior to the filing of the instant case, and the Vehicle was transferred to Michigan
by Sperro, LLC pursuant to the TSSA that the Debtor signed on December 15,
2016. This transfer was made to the detriment of NFCU and its interest in the
Vehicle.

18. Prior to the removal of the Vehicle from the State of Virginia,
NFCU was unaware of the existence of the TSSA and of the transfer of the
Vehicle from the Debtor’s possession to Sperro, LLC, and its transportation to
the State of Michigan.

19. At no time did NFCU consent to the terms and conditions of the
TSSA or to the transfer of the Vehicle into the possession of Sperro, LLC, or to
the transfer of the Vehicle to the State of Michigan.

20. Although NFCU has never received a notice of mechanic’s lien sale
by Sperro, LLC, NFCU asserts and alleges that Sperro, LLC may have
fraudulently sold the 2015 Toyota Tacoma in accordance with its fraudulent
scheme executed through the terms of the TSSA. NFCU has attempted to contact
Sperro, LLC, and it refuses to respond to its inquiries regarding the location of
the Vehicle or the terms upon which the Vehicle can be released to the
possession of the lienholder, NFCU. Therefore, NFCU must assume that Sperro,
LLC no longer has the Vehicle and it is likely to have been sold.

21. In light of these alleged facts and circumstances, NFCU submits that
the Debtor’s discharge should be denied in accordance with 11 U.S.C. § 727 (a)(2)(A) as
the Debtor, with intent to hinder, delay or defraud a creditor ... has transferred, removed,

5


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Colloquy

THE CLERK: Items number 62 and 63, Brett Hall.

THE COURT: Good morning, Ms. Kezman.

MS. KEZMAN: Good morning, Your Honor. We're here
today on the motion of Navy Federal Credit Union to approve a
settlement with debtor and debtor's counsel. The settlement is
to settle the -- Navy Federal filed a complaint under 727 and
523 objecting to the debtor's discharge as well as the
nondischargeability of the debt.

I want to ask you quick, do you want me to go through
all the details or just tell you that we have noticed all the
creditors and nobody has objected? I have spoken with the U.S.
Trustee. He is in favor of the settlement.

THE COURT: Well, how about if we start with a
question.

MS. KEZMAN: Sure.

THE COURT: This settlement, when I read it, frankly
seemed to be awfully generous to the debtor and to Ms.
Pfeiffer. I view what occurred here, at least to the extent
that it has been pled -- and of course, that's all know so far,
as being, frankly, being one of the most egregious things I've
seen in an awfully long time. And one of the reasons why this
and the other motion are on today is I need to find out more
about this before I'm prepared to make any adjudication.

What happened, again, to me, seems facially -- and

again, only from the pleadings, that's all I'm aware of at this

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Colloquy 18

THE COURT: That is an understatement. I don't --
well, I'm not going to say any more, because the Court
obviously will give due consideration to whether it will
exercise its duties with respect to the termination of fitness
to remain an attorney among the bar of this court.

MS. KEZMAN: Your Honor --

THE COURT: Yes.

MS. KEZMAN: -- can I say one more thing before you
rule? My only thing, when you -- again, I bring up that you
said you thought the settlement was too lenient.

In terms of Navy Federal, the only -- if the Court
wanted to, we could resubmit the motion and put in all the fees
that -- the legal fees that Navy Federal has paid us, and that
would perhaps make them completely whole. And I'm not -- I
would think that debtor's counsel would be agreeable to that.

THE COURT: Well, I'm not in a position to renegotiate
your deal. I either have to approve it or not. So I don't
think it's appropriate to, again, to become your mediator. I'm
the judge in the case. I'm not your mediator. If you and Ms.
Pfeiffer want to change your deal, that's all I can say. I'm
not in a position to negotiate. My role is to either accept or
reject the settlement, and that's all I can and will do. So --

But I will say this, Ms. Pfeiffer. Whatever you pay
or not in this case is not going to change one iota what the

Court will decide to do or not do as far as the exercise of its

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transferred possession of the collateral to Sperro. The Debtor made this transfer with no intention
of paying the fees and cost agreed to by him in the TSSA, ,and with no intention of recovering the
Vehicle. Likewise, the Debtor made this voluntary transfer of NFCU’s collateral in direct breach
of the warranties and promises he made to NFCU through the Note, Disclosure and Security
Agreement. As a result of the Debtor's willful and malicious behavior, NFCU has been damaged
in the principal amount of $50,343.84, plus accruing finance charges and legal fees and costs, and

such debt should be excepted from discharge pursuant to 11 U.S.C. § 523(a)(6).

ANSWER: Paragraph 26 is a Jegal conclusion and requires no response. To the

extent an answer is required, the allegations contained in Paragraph 26 are neither admitted

or denied on the basis that Defendant does not have sufficient knowledge or information to

form « conclusion regarding their validity.

27, NFCU furhter requests that this Court aware it reasonable attorney’s fees and costs
incurred in connection with the filing of this Compaint.
ANSWER: DENIED

WHEREFORE, Defendant requests that this Honorable Court deny Plaintiff's requested
relief and request that he be awarded attorney fees pursuant to 11 U.S.C. 523(d).

Defendant has undertaken in good faith to identify all of the special and/or affirmative
defenses that he may have with respect to the Plaintiff's claims. Defendant reserves the right to
reevaluate, restate. and/or delete any defenses and/or assert additional defenses as it deems
appropriate.

1. Plaintiff fails to state a claim upon which relief may be granted.

w

. Plaintiff's claims are barred in whole or in part by payment.
. Plaintiff's claims are barred in whole or part by waiver and equitable estoppel.

we

_ Plaintiff's claims are barred in whole or in part by release, satisfaction, or fraud.

*

. Plaimill’s conspiracy to commit fraud theory is not a core proceeding, and therefore this

wu

Edrie A. Pfeiffer 41791
Hampton Roads Legal Services
372 S. Independence Blvd.
Suite 109

Virginia Beach, VA 23452
(757) 340-3100


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I hereby certify that a true copy of the foregoing Answer will be electronically transmitted
via ECF notification upon filing of the same with the Court to Anastasia P. Kezman, Esquire,
Attorney for Plaintiff and Carolyn Camardo, Trustee, and was mailed to the U.S. Trustee at 200
Granby Street. Room 625, Norfolk, VA 23510 and Brett Hall, Debtor at 5009 Jeanne St, Virginia
Beach, VA_23-462, on this vune 4 , 2016.

en, Pleiffer -

Edrie A. Pfeiffer 41791
Hampton Roads Legal Services
372 S, Independence Blvd.
Suite 109

Virginia Beach, VA 23452
(757) 340-3100

Edrie A. Pfeiffer 4179)
Hampton Roads Legal Services
372 S. Independence Blyd.
Suite 109

Virginia Beach, VA 23452
(757) 340-3110


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willfully and intentionally entered into a fraudulent scheme with Sperro, LLC to transfer
possession of NFCU’s collateral to Sperro, LLC by signing the TSSA, and then
subsequently willfully and voluntarily transferred possession of the collateral to Sperro.
The Debtor made this transfer with no intention of paying the fees and cost agreed to by
him in the TSSA, and with no intention of recovering the Vehicle. Likewise, the Debtor
made this voluntary transfer of NFCU’s collateral in direct breach of the warranties and
promises he made to NFCU through the Note, Disclosure and Security Agreement. As a
result of the Debtor’s willful and malicious behavior, NFCU has been damaged in the
principal amount of $50,343.84, plus accruing finance charges and legal fees and
costs, and such debt should be excepted from discharge pursuant to 11 U.S.C. §
523(a)(6).

27.  NFCU further requests that this Court award it reasonable attorney’s fees
and costs incurred in connection with the filing of this Complaint.

WHEREFORE Navy Federal Credit Union hereby requests that this Court enter
an Order declaring that the debtor’s discharge be denied pursuant to 11 U.S.C§§
721(a)(2)(A) and/or 727(a)(5), and/or in the alternative, that the secured debt owed to
NFCU, in the amount of $50,343.84, plus accruing interest and legal fees, be declared
non-dischargeable pursuant to 11 U.S.C.§ 523(a)(6), and that the Order provides for
NECU’s recovery of legal fees and costs incurred in connection with the filing of this
Complaint, and for such further relief as this Court deems just and appropriate.

DATED this 12" day of May 2016.
NAVY FEDERAL CREDIT UNION

By: __/s/ Anastasia Kezman
Anastasia Kezman

Anastasia Kezman, Esq.
VSB# 33325
Deborah Kirkpatrick, P.C.