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FILED

NOV 30 2016

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

ORDERED PUBLISHED

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-16-1172-KiFPa

)

HALINA WOJCIK, ) Bk. No. 6:16-13228-SHY

)

Debtor. )

)

 )

)

MAGDELENA STRICKLAND, )

)

Appellant, ) 

) O P I N I O N

v. )

)

U.S. TRUSTEE, )

)

Appellee. )

______________________________)

Submitted Without Oral Argument 

on November 17, 2016

Filed - November 30, 2016

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Scott H. Yun, Bankruptcy Judge, Presiding

 

Appearances: Appellant Magdelena Strickland, pro se, on brief;

Russell Clementson on brief for appellee, the U.S.

Trustee.

Before: KIRSCHER, FARIS and PAPPAS,1 Bankruptcy Judges.

1 Hon. Jim D. Pappas, Bankruptcy Judge for the District of

Idaho, sitting by designation.
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KIRSCHER, Bankruptcy Judge:

Appellant Magdelena Strickland, a bankruptcy petition

preparer2 (“BPP”), appeals an order granting the motion of the

U.S. Trustee (“UST”) under § 1103 to disgorge her petition

preparation fees and to impose fines and damages, totaling $2,650. 

We AFFIRM.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY 

A. How Debtor and Strickland met

The facts are mostly undisputed. Strickland does not have a

law degree, she is not an attorney and she does not work under the

supervision of an attorney. She and her husband, who is also not

an attorney, own and operate “Low Cost Paralegal Services”

(“LCPS”), a sole proprietorship, in Las Vegas, Nevada. LCPS is

registered with the Nevada Secretary of State as a document

preparation service. Strickland holds an Associate of Arts degree

in Paralegal Studies and worked as a paralegal for law firms

before starting her business in 2009. Strickland confirmed that

despite her legal training, LCPS operates solely as a document

preparation service and thus is not required to work under the

supervision of a licensed attorney. 

Chapter 7 debtor Halina Wojcik (“Debtor”) contacted LCPS for

preparation of her chapter 7 bankruptcy petition. Debtor lives in

2 Strickland does not dispute that she is a bankruptcy

petition preparer as defined in § 110(a).

3 Unless specified otherwise, all chapter, code and rule

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

the Federal Rules of Bankruptcy Procedure, Rules 1001-9037. 

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California. She found Strickland and her bankruptcy petition

preparation services through LCPS by searching on the internet

using the word “paralegal.” Strickland maintains a website,

www.lowcostparalegalsolutions.com, at which she promotes her

business. LCPS’s website’s home page reads: “Low Cost Paralegal

Services — The Lower Cost Alternative to Attorney Document

Preparation.” It also reads: “If a [sic] issue ever arises,

please feel free to contact our paralegal for immediate

resolution.” Finally, the website reads: 

Knowing the difficulty of determining the procedure for

various legal actions for those not immersed in the legal

system, we have enjoyed being able to assist others

helping to locate and generate the paper work required

for various legal actions. 

 

While the State of Nevada prohibits paralegals from

providing legal advice, in many cases the only assistance

needed is with the preparation of the documents and

filing; and for that purpose Low Cost Paralegal Services

is honored to be able to assist. We pride ourselves on

the work that has been and is being completed, on a daily

basis.

Shortly after viewing the website, Debtor called LCPS and

spoke with Strickland. Strickland informed Debtor over the phone

that she was not an attorney but could help her prepare and file

her bankruptcy documents. Strickland sent Debtor a questionnaire

to complete and return. Debtor completed the questionnaire and

faxed a copy back to Strickland. A few days later, Debtor met

with Strickland at her office in Las Vegas to sign her bankruptcy

documents. Debtor also executed a Document Preparation Services

Agreement, which stated in several places that LCPS and Strickland

were not able to give legal advice and could not accept money for

legal advice, and that any information provided through LCPS could

not be used for legal advice. Debtor paid LCPS $125 for preparing

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her bankruptcy documents and $25 for requesting a credit report. 

B. The UST’s motion under § 110

In her chapter 7 bankruptcy petition and statement of

financial affairs, Debtor identified Strickland as the nonattorney she paid to assist her in filling out her bankruptcy

forms. Strickland confirmed her role as Debtor’s BPP in the (1)

Disclosure of Compensation of BPP (Form 2800) and (2) the

Declaration and Signature of the BPP (Form 119). 

The UST moved under § 110(f), (h), (i) and (l) to disgorge

Strickland’s fee of $125,4 impose damages of $2,000 and fine her

$500 on the basis that Strickland violated § 110(f) by using the

word “legal” in advertising her business. The UST points out that

Strickland used the word “paralegal”: (1) in connection with the

services she provided to Debtor; (2) in the name of her business;

(3) in the web address used by Strickland to promote her business;

and (4) in the web pages describing the services performed by her

business, including bankruptcy services. The UST contended that

this use violated the strict liability provisions of § 110(f). 

The UST argued that Strickland’s use of the term “paralegal” left

the impression that a debtor using her services would be receiving

the equivalent of attorney or legal services but at a lower cost,

not only the typing services permitted for BPPs. The UST argued

that Strickland’s violation of § 110(f) subjected her to actual

damages to Debtor for the amount of her fee and the $2,000

4 The amount Debtor paid to Strickland was reported as $125

in the Disclosure of Compensation and as $150 in Question 16 of

Debtor’s Statement of Financial Affairs. The UST initially sought

disgorgement of the $125 fee. However, in his reply brief he

requested that the entire $150 paid to Strickland be disgorged. 

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mandated under § 110(h)(3)(B) and (i)(1), and a fine of $500

payable to the UST under § 110(l)(1). A hearing was set for May

26, 2016. 

Strickland opposed the UST’s motion. She admitted to using

the word “paralegal” in advertising her business, but argued that

no lay person would believe LCPS was anything more than a document

preparation service, especially when considering the disclosures

she makes in person and on the phone with clients, in her email

tags, in her client agreements, on signs posted in her office, and

on her website stating that she is not an attorney and that

neither she nor LCPS can offer any legal advice or legal services. 

For example, two signs with 12" letters posted in the LCPS office

state: “I AM NOT AN ATTORNEY IN THE STATE OF NEVADA. I AM NOT

LICENSED TO GIVE LEGAL ADVICE. I MAY NOT ACCEPT FEES FOR GIVING

ADVICE.” Strickland further argued that her business name did not

use the word “legal” solely on its own, and thus would not give a

lay person the impression that the office is a legal service or

gives legal advice. Because Strickland was unable to travel to

California for the hearing, she requested to appear by telephone,

asking that the court contact her at the number provided. 

In reply, the UST argued that Strickland’s disclaimers of not

offering legal services or legal advice did not excuse her

prohibited use of the word “legal” in her advertising. In fact,

argued the UST, by repeatedly using the word “paralegal” and

promoting her experience levels, Strickland had knowingly

embellished the illusion to her clients that they will receive the

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essential legal assistance necessary to obtain bankruptcy relief.5

The hearing went forward on May 26, 2016. When entering

appearances, the bankruptcy court inquired if anyone for

Strickland was on the phone; no one was there. Acknowledging that

Strickland had asked to appear by telephone, the court noted that

although it has a liberal policy on telephonic appearances, which

is posted on the court’s website, Strickland needed to contact

Court Call in order to appear by phone; the court was not going to

go outside its own procedure to call Strickland for the hearing. 

In reviewing the merits of Strickland’s opposition, the court

opined that it was not convincing. Strickland admitted to the

UST’s central allegation, that she is “advertising legal or

paralegal services.” In ruling in favor of the UST, the court

stated:

So my tentative ruling is to grant the motion. Disgorge

the fee of $150. Statutory damages of [$]2,000 and fine

of [$]500.

. . . .

So, I am granting the motion as set forth in the motion. 

And the only variance is the, I’m not granting the

additional $500 in fine that the U.S. Trustee requested

[in his reply for the unauthorized practice of law].

Hr’g Tr. (May 26, 2016) 3:8-10, 4:14-16. 

The bankruptcy court entered an order in accordance with its

oral ruling on June 17, 2016. This timely appeal followed. 

5 In his reply, the UST added a claim against Strickland

under § 110(e)(2) for the unauthorized practice of law based on

Strickland’s alleged “choosing” of Debtor’s exemptions as under 

§ 322 instead of § 522. Strickland argues on appeal that this was

a typographical error. In any event, the bankruptcy court

declined to consider the UST’s added claim for lack of notice to

Strickland and did not award any damages on that basis. 

Therefore, we do not address Strickland’s arguments on this issue.

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II. JURISDICTION 

The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334

and 157(b)(2)(A). We have jurisdiction under 28 U.S.C. § 158.

III. ISSUES

A. Did the bankruptcy court violate Strickland’s procedural

due process rights by not telephoning her for the hearing? 

B. Did the bankruptcy court err in finding that Strickland

violated § 110(f) or abuse its discretion by ordering disgorgement

and imposing statutory damages and fines?

IV. STANDARDS OF REVIEW

Whether procedures used by the bankruptcy court violated an

individual’s due process rights is a mixed question of law and

fact that we review de novo. Wilborn v. Gallagher (In re

Wilborn), 205 B.R. 202, 206 (9th Cir. BAP 1996) (citing Rose v.

United States, 905 F.2d 1257, 1259 (9th Cir. 1990)).

The bankruptcy court’s interpretation of the Code is a matter

of law, subject to de novo review. Id. 

We review the bankruptcy court’s imposition of fines under 

§ 110 for an abuse of discretion. Frankfort Dig. Servs., Ltd. v.

U.S. Trustee (In re Reynoso), 315 B.R. 544, 550 (9th Cir. BAP

2004), aff’d, 477 F.3d 1117 (9th Cir. 2007) (citing Consumer Seven

Corp. v. U.S. Tr. (In re Fraga), 210 B.R. 812, 816 (9th Cir. BAP

1997)). A bankruptcy court abuses its discretion if it applies an

incorrect legal standard or misapplies the correct legal standard,

or if its factual findings are illogical, implausible or

unsupported by evidence in the record. Trafficschool.com, Inc. v.

Edriver Inc., 653 F.3d 820, 832 (9th Cir. 2011).

We may affirm the bankruptcy court’s order on any basis

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supported by the record. See ASARCO, LLC v. Union Pac. R. Co.,

765 F.3d 999, 1004 (9th Cir. 2014).

V. DISCUSSION 

A. The bankruptcy court did not violate Strickland’s procedural

due process rights.

Due process is a relatively minimal standard that only

requires “notice reasonably calculated, under all the

circumstances, to apprise interested parties of the pendency of

the action and afford them an opportunity to present their

objections.” Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S.

306, 314 (1950); Tennant v. Rojas (In re Tennant), 318 B.R. 860,

870 (9th Cir. BAP 2004) (procedural due process requires notice

and an opportunity to be heard). The UST’s moving papers clearly

stated what Code sections he believed Strickland violated and what

relief he was seeking. He provided proper notice to Strickland of

the hearing date and time and notice under Local Rule 9013-1(f)

that any objection had to be served within 14 days prior to the

hearing. Strickland timely filed an opposition to the motion,

defending her position.

Strickland contends the bankruptcy court erred by refusing to

call her for the hearing, which appears to be a procedural due

process argument. She argues that no “Court Call” directions were

ever given to her and that no such “Court Call rule” exists on the

website for the Bankruptcy Court for the Central District of

California. Strickland contends therefore that she had no way of

knowing a prepayment to Court Call was required prior to being

allowed to be heard at oral argument. 

Local Rule 9074-1, which is available on the bankruptcy

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court’s website, discusses telephonic appearance for court

hearings and provides that “[a] party who wishes to appear

telephonically at a court hearing must consult the court’s web

site to determine whether a telephonic appearance on a particular

matter is permissible and to obtain the judge’s procedure for

requesting and making a telephonic appearance.” Telephonic

appearance instructions are available for each bankruptcy judge on

the court’s website. They provide detailed, step-by-step

instructions on how to appear by telephone, including contact

information for Court Call. If Strickland was unsure where to

look on the court’s website, running a search for “telephonic

appearance” in the website’s search engine leads one to the

judge’s procedures. 

As a litigant, it was Strickland’s responsibility to

determine whether and how she could appear by phone. Her

unfamiliarity with the rules for a telephonic appearance is no

excuse; the court not calling her for the hearing certainly does

not constitute a violation of her due process rights. Pro se

litigants are not excused from complying with procedural rules. 

King v. Atiyeh, 814 F.2d 565, 567 (9th Cir. 1987), overruled on

other grounds, Lacey v. Maricopa Cty., 693 F.3d 896 (9th Cir.

2012) (“Pro se litigants must follow the same rules of procedure

that govern other litigants.”). Strickland’s acknowledgment of

her extensive paralegal training is an even more compelling reason

to expect her to comply with the local rules for participating in

telephonic hearings. The bankruptcy court therefore acted within

its discretion to enforce the court’s local rules and procedures

and to decline to call Strickland as she requested. See Simmons

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v. Navajo Cty., Ariz., 609 F.3d 1011, 1017 (9th Cir. 2010) (trial

court has broad discretion in interpreting and applying local

rules). 

Moreover, Strickland has not shown how she was prejudiced

from what she considers were procedural deficiencies. See Rosson

v. Fitzgerald (In re Rosson), 545 F.3d 764, 777 (9th Cir. 2008)

(“Because there is no reason to think that, given appropriate

notice and a hearing, Rosson would have said anything that could

have made a difference, Rosson was not prejudiced by any

procedural deficiency.”). Strickland has not articulated what she

could have said or done at the hearing that would have changed the

outcome. As we explain below, § 110(f) is a strict liability

provision and Strickland admitted to violating it in her

opposition. She advanced only the legal argument that use of the

word “paralegal” did not violate § 110(f). The court found that

it did, as do we. Thus, nothing she would have said or done at

the hearing had the court called her as she requested would have

changed the outcome. 

B. The bankruptcy court did not err in determining that use of

the word “paralegal” violates § 110(f) or abuse its

discretion in fining Strickland.

Perceiving a need to curtail widespread fraud, abuse and the

unauthorized practice of law, Congress enacted legislation in 1994

seeking to restrict the activities of non-attorney BPPs. See Ferm

v. U.S. Tr. (In re Crawford), 194 F.3d 954, 957 (9th Cir. 1999). 

The centerpiece of that legislation was § 110. Id. Section 110

was designed to prevent BPPs from taking “unfair advantage of

persons who are ignorant of their rights both inside and outside

the bankruptcy system.” Hastings v. U.S. Tr. (In re Agyekum), 225

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B.R. 695, 701 n.7 (9th Cir. BAP 1998) (quoting H.R. Rep. 103-834,

at 40-41(1994)). Section 110 imposes a number of requirements and

restrictions on BPPs and also imposes fines for noncompliance. 

See In re Branch, 504 B.R. 634, 639-40 (Bankr. E.D. Cal. 2014)

(explaining requirements, restrictions and fines). The U.S.

Trustee has standing to file a motion to request turnover of fees,

statutory damages and fines. § 110(h)(4), (i)(1) and (l)(3). 

Section 110(f) provides that a BPP “shall not use the word

‘legal’ or any similar term in any advertisements, or advertise

under any category that includes the word ‘legal’ or any similar

term.” (Emphasis added.) Strickland raises the same arguments

here that she did before the bankruptcy court, that using the name

“Low Cost Paralegal Services” would not mislead the public into

thinking she offered legal services as the UST alleged, especially

when considering her disclaimers, and that her business name does

not contain the word “legal” solely on its own. Thus, argues

Strickland, she did not violate § 110(f). We disagree. 

Several courts, including the Panel, have held that a BPP’s

use of the word “paralegal” violates § 110(f), not only because it

actually contains the prohibited word “legal”, but also because it

promotes the BPP’s specialized legal expertise or knowledge and

misleads lay persons into believing legal services are being

provided. U.S. Tr. v. Burton (In re Rosario), 493 B.R. 292, 349

(Bankr. D. Mass. 2013); U.S. Tr. v. Summerrain (In re Avery), 280

B.R. 523, 530 (Bankr. D. Colo. 2002) (BPP who does business under

trade name incorporating the word “paralegal” and advertises trade

name violates § 110(f)); In re Bush, 275 B.R. 69, 82 (Bankr. D.

Idaho 2002) (holding that BPP’s use of the word “legal” within the

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term “paralegal” on a sign in his office violated § 110(f)); In re

Moffett, 263 B.R. 805, 813 (Bankr. W.D. Ky. 2001) (holding that a

trained paralegal working as a BPP violated § 110(f) by using the

word “paralegal” on her business cards); In re Gomez, 259 B.R.

379, 385 (Bankr. D. Colo. 2001) (holding that use of “paralegal”

trade name in advertisements violates the letter and spirit of 

§ 110(f)); Fessenden v. Ireland (In re Hobbs), 213 B.R. 207, 215

(Bankr. D. Maine 1997) (use of the term “paralegal,” a “similar

term” to “legal” under § 110(f), fosters consumer confusion of the

character Congress intended to eliminate); In re Burdick, 191 B.R.

529, 535 (Bankr. N.D.N.Y. 1996) (BPP’s use of the word “paralegal”

in her Pennysaver ads violated § 110(f) because paralegal is a

“similar term” that falls within the statute). See also Abonal v.

U.S. Tr. (In re Jackson), 2014 WL 5575293, at *10 (9th Cir. Nov.

3, 2014) (BPP with business name “Abonal Paralegal Services” who

failed to prove he was a paralegal acting under the direct

supervision of an attorney violated § 110(f) by using the term

“paralegal” in his business name and business cards). 

Contrary to Strickland’s argument, the plain language of 

§ 110(f) prohibits any use of the word “legal” in an advertisement

by a non-attorney BPP, including the word “paralegal.” “The

statute does not say that some uses of the word ‘legal’ are

acceptable through context, modifier, or otherwise. The

prohibition is absolute and unambiguous.” In re Farness, 244 B.R.

464, 468 (Bankr. D. Idaho 2000). Therefore, whether Debtor was

actually misled into thinking Strickland offered legal advice or

legal services is not the test for whether Strickland violated 

§ 110(f). Section 110(f) is a “strict liability” provision. 

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Bolen v. King (In re Howard), 351 B.R. 371, 380 (Bankr. W.D. La.

2005); In re Gomez, 259 B.R. at 385. Further, her claimed

adherence to Nevada law also lacks merit; § 110(f) is a federal

bankruptcy statute, not a state statute. 

Strickland’s use of the business name “Low Cost Paralegal

Services” violates § 110(f). So too does her use of the terms

“paralegal” and “legal” throughout her website in connection with

advertising her bankruptcy preparation services. In re Reynoso,

477 F.3d at 1124 (BPP’s use of the words “law” and “legal” on

BPP’s website violated § 110(f)). The bankruptcy court did not

err in determining that Strickland violated § 110(f). 

A BPP who violates § 110, including subsection (f), “or

commits any act that the court finds to be fraudulent, unfair, or

deceptive” shall be ordered by the court to pay to the debtor,

(A) the debtor’s actual damages;

(B) the greater of—

(i) $2,000; or

(ii) twice the amount paid by the debtor to the

bankruptcy petition preparer for the preparer’s

services; and

(C) reasonable attorney’s fees and costs in moving for

damages under [11 U.S.C. § 110(i)].

§ 110(i)(1). In addition, under § 110(h)(3)(B), the fees charged

by a BPP who fails to comply with subsection (f) “may” be

forfeited. Finally, § 110(l)(1) provides that a BPP who fails to

comply with subsection (f) “may” be fined not more than $500 for

each such failure. 

The bankruptcy court did not find that Strickland’s conduct

was fraudulent, unfair or deceptive. But she did nonetheless

violate § 110(f), which is enough to mandate damages under 

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§ 110(i)(1). The use of the word “shall” in § 110(i)(1) indicates

that the bankruptcy court has no discretion in deciding whether to

impose statutory damages of $2,000 once it found a violation of 

§ 110(f). Even if no actual damages are requested, the court must

award statutory damages which are computed to be the greater of

either (1) $2,000 or (2) twice the amount paid by the debtor to

the BPP for his or her services ($300 here). In re Branch, 504

B.R. at 648. As such, the court did not err in awarding the

$2,000 in damages to Debtor. 

The disgorgement of the $150 fee Debtor paid to Strickland

and the $500 fine are, however, discretionary, with Congress’s use

of the term “may” in both § 110(h)(3)(B) and (l)(1). See id.

(court is permitted, but not required, to order the forfeiture of

fees or impose statutory fines when violation of § 110(f) has

occurred). The bankruptcy court ordered Strickland to disgorge

her fee of $150 and fined her $500. The record supports these

discretionary awards. Given Strickland’s clear violation of 

§ 110(f) with her use of the word “paralegal” in advertising since

at least 2009, the bankruptcy court was within its discretion to

order the disgorgement of her $150 fee under § 110(i)(1) and to

fine her the maximum of $500 under § 110(l)(1).

VI. CONCLUSION

For the foregoing reasons, we AFFIRM. 

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