Opinion ID: 1964843
Heading Depth: 1
Heading Rank: 4

Heading: board's determinations

Text: The following recitation sets forth the findings of fact that the Board made in support of its conclusions of law. The Petition for Discipline arises from Benge's representation of ACC in a Chapter 13 bankruptcy filing in the United States Bankruptcy Court for the District of Delaware. The Debtors, Vicki and Gary Solario, (the Debtors) filed for bankruptcy in August 23, 1996. The Debtors were represented by Joseph B. Green, Esquire. One of the Debtors' creditors was ACC. At the time of the bankruptcy filling, the Debtors owed ACC the sum of $9,732.09 pursuant to an installment sales agreement for the purchase of a motor vehicle. ACC filed a proof of claim on September 26, 1996. On October 10, 1996, Benge was retained by ACC. For the period of time from October 16, 1996, when Benge filed an objection to the confirmation of the plan and a memorandum of law, until January 27, 1997, the bankruptcy court entered an order finding that the Debtors had failed to make timely pre-confirmation payments as required by the bankruptcy code. The court ordered the Debtors to cure all preconfirmation arrears on or before February 17, 1997. The order stated that if the Debtors failed to comply the bankruptcy would be dismissed on February 24, 1997. On January 28, 1997, Benge advised David Dinsmoor of ACC by telephone that the bankruptcy judge had signed an order providing for the dismissal of the petition with prejudice but that the order would not go into effect until February 24, 1997. ACC entered a summary of the conversation in an activity log on that date. A copy of the activity log was entered into evidence as Exhibit 1. The bankruptcy court held a status hearing on February 24, 1997. At that time, the bankruptcy Judge signed an order extending the Debtors' time to comply with the January 27, 1997 order to March 17, 1997. Benge did not attend the February 24, 1997 hearing. The ACC activity log contains an entry of February 25, 1997. The entry states TT Atty Benge, verified case dismissed with prejudice, okay to assign for repo. Benge testified that while at the bankruptcy court on February 24 or 25 for another matter, he attempted to check the Solario file. He testified that the file was out but he confirmed with the court clerk, Kathleen Fitzpatrick, that the Debtors' petition for bankruptcy had been dismissed for the failure to comply with the order requiring the Debtors to make the pre-confirmation payments. This information was passed on to ACC on February 25, 1997. It appears instead that the Debtors' petition was not dismissed by the bankruptcy court on February 24, 1997. On the bottom of the January 27, 1997 order, there is a handwritten notation which says extended to 3/17/97 and below that a signature line wherein the word judge is written in and to the left of that line is the date of 2/24/97. Kathleen Fitzpatrick testified that she filled in the handwritten notation and that Judge Peter J. Walsh of the bankruptcy court signed it. Although there was a discussion in court on February 24, 1997 about dismissing the petition for the failure of the Debtors to comply with the pre-confirmation order, Attorney Green prevailed upon Judge Walsh not to dismiss the petition and to extend the time by which the Debtors could comply. Ms. Fitzpatrick testified that when the form was returned to the file it was returned as the same docket number because it was simply an extension of the January 27, 1997 order. The activity log contains an entry of February 26, 1997 wherein Benge called David Dinsmoor of ACC stating that he, Benge, had received a call from the Debtors' counsel stating that the Debtors had complied with the pre-confirmation order and that the dismissal has been vacated. The note then states that he will check out with judge and call back tomorrow. There is then an entry of February 28, 1997 stating that David Dinsmoor spoke to Benge, that Benge had reviewed the file, and there is nothing indicating that the order was not in effect. The order referenced in the February 28, 1997 activity log note is the order dismissing the petition of the Debtors. A letter from Joseph B. Green to Benge dated March 3, 1997 states, inter alia, [a]s you are aware from speaking with my legal assistant last week, your client, in violation of the automatic stay imposed by the Bankruptcy Court, wrongfully repossessed the Debtors' motor vehicle. My understanding was that you and/or your client mistakenly believed the Debtors' case was dismissed, and you were going to advise your client to immediately return Debtors' vehicle. The letter further advises that the Debtors' vehicle had not yet been returned and if it was not returned by the end of business on March 3, 1997, Attorney Green would file an application on March 4, 1997, for an order to compel the return of the vehicle, for damages and for penalties, and a request for appropriate sanctions, costs and fees. Green testified that there was no response by Benge to the March 3, 1997 letter. The vehicle had been repossessed on February 26, 1997. However, the vehicle was not transported elsewhere because Mr. Solario called and informed someone at ACC on February 28, 1997 that the vehicle should not have been repossessed. There is no indication that Benge provided ACC a copy of the March 3, 1997 letter. On March 5, 1997, attorney Green filed a complaint with the bankruptcy court seeking to compel ACC to return the Solario vehicle because the repossession was in violation of the automatic stay provisions of 11 U.S.C. § 362. The complaint also sought sanctions against ACC. Attorney Green provided a copy of the complaint to Benge. ACC received a copy of the complaint on March 6, 1997. The ACC activity log contains an entry of March 11, 1997. At that point, David Dinsmoor spoke to Benge and Benge confirmed to ACC that the order dismissing the bankruptcy petition had been signed by the court and that the order dismissing the petition was self-executing. The log entry states that Benge was working to get papers so that he could provide them to ACC. (Exhibit 18). There is then a fax from David Dinsmoor to Benge on March 13, 1997. The March 13, 1997 note states as follows: Please be advised, we received the attached complaint this day. Our actions were based on your telephonic representation which have not been formally contradicted other then (sic) this complaint. Obviously, we are confused given the differences stated. If the case was dismissed with prejudice, you are authorized to respond assertively that the above is a frivolous action and hold Debtors' Counsel liable for our attorney fees and other provable costs. If such is not the case, please advise immediately. Kindly contact me immediately to confirm receipt of this communication and your thoughts on this matter. The bankruptcy court held a status conference on March 17, 1997. At that time, the Debtors' time to comply with the court's earlier order was extended to March 24, 1997. David Dinsmoor was advised by Benge that the Debtors were still in arrears of the pre-confirmation payments, that the dismissal order was self-executing, and that Green was going to withdraw the March 5 complaint and convert the Chapter 13 petition to a Chapter 7 petition. Dinsmoor was also told that the Debtors would stipulate to the surrender of the repossessed motor vehicle. The March 17, 1997, ACC activity log entry states that the Debtors' vehicle would continue to be held until ACC received proper documentation. On March 24, 1997, Green wrote to the bankruptcy trustee Michael B. Joseph, Esquire and forwarded a money order in the amount of $768.00 representing the balance of the pre-confirmation payments. In pertinent part, the forwarding letter states that ... John Benge's client, ACC consumer Finance Corp., in violation of the automatic stay, wrongfully repossessed said vehicle. I have filed an adversarial complaint which is scheduled for trial on April 29, 1997.... This letter was copied to Benge. It appears that this letter was not forwarded to ACC nor did Benge make any independent efforts to confirm that the bankruptcy petition had been dismissed. The answer to the March 5 complaint was due on April 11, 1997. No answer to the complaint was filed. Benge testified that he spoke to Jack Cohen, general counsel for ACC, and that Cohen advised him to take a position that he could not take. This testimony was not confirmed by letter, nor is there any entry in the ACC activity log referencing the alleged conversation. On April 16, 1997, Attorney Green wrote to Judge Peter I. Walsh. The letter states: Trial is scheduled for April 29, 1997 in the above-captioned case; Defendant did not file an Answer to the complaint and default judgment is in order. I have prepared and enclosed an Order which I request your Honor sign; however, as you will see, the Order I prepared contains requests for actual damages incurred, punitive damages for willful violation of § 362 and attorney fees. Therefore, I request that matter remain on the calendar for April 29th for presentation of evidence/support for these matters. The letter of April 16, 1997 is copied to Benge and to the Trustee, Michael B. Joseph, Esquire. Appended to the letter is an order providing that the Debtors' vehicle be returned to the Debtors and providing for costs and sanctions against ACC. There is no indication that this letter or the proposed order was provided to ACC by Benge. While ACC was in default as of the April 16, 1997 letter, no default had yet been entered by the court. On April 24, 1997, David Dinsmoor of ACC Corporation faxed a memorandum to Benge. The memorandum states: [W]e remain in possession of the subject vehicle and would like to sell same. Kindly advise us of the status of this matter and when we will receive something definitive from the court and/or opposing counsel. It appears that prior to the April 24, 1997 memorandum David Dinsmoor of ACC called Benge on April 17, 1997 and April 22, 1997, and he did not receive a response to either telephone call. The bankruptcy court held a hearing on the Debtors' complaint on April 29, 1997. Benge was not present at the hearing, nor was ACC represented. The court entered an order on April 30, 1997, requiring the Debtors' vehicle to be returned to the Debtors within five business days from the mailing of the order. The order provided that it shall be mailed by Federal Express/next day delivery to Defendant with a copy hand-delivered to Benge. The order further provided that if the Debtors' vehicle was not delivered to Joseph B. Green, Esquire within the allotted time that ACC would be penalized in the amount of $100.00 per day for the benefit of the Debtors/plaintiffs. The order also provided that a future date would be scheduled and noticed for a hearing to consider the Debtors'/plaintiffs' claims for damages incurred as a result of Defendant's wrongful repossession, for attorney's fees and costs and for any additional penalties deemed appropriate by the Court. It appears that a copy of the order was forwarded by Joseph B. Green to ACC on May 1, 1997 in compliance with the April 30, 1997 order issued by Judge Walsh. A copy of counsel's letter of May 1 and the order were provided to Benge. There were then several letters between ACC and Joseph Green about the return of the Debtors' vehicle. The vehicle was returned on May 7, 1997. The ACC activity log contains an entry of May 19, 1997 stating that ACC had received notice of the hearing and the Debtors' objection to the ACC claim due to the improper repossession. The log entry then states that all information had been sent to Benge to file a response and to appear and present a defense based upon the good faith belief of ACC that the bankruptcy petition had been dismissed with prejudice. There were then a series of telephone calls and messages by ACC to Benge on May 19, May 20, May 21, May 22, and May 28 which were not returned. It appears from the May 29 log entry that David Dinsmoor spoke to someone at the Benge's office on that date and a message was passed back to ACC that Benge would be at the June 24 hearing. The bankruptcy court held a hearing on June 24, 1997. Benge did appear representing the interests of ACC at the penalty hearing. As a consequence of the hearing, the court entered an order on June 25, 1997 assessing damages against ACC in the amount of $2,299.54, attorney's fees in the amount of $515.90, and a fine in the amount of $500.00. The total award against ACC was in the amount of $3,315.44. The order required the payments to be made to Attorney Green on or before July 7, 1997. David Dinsmoor sent a letter to Joseph B. Green on July 2, 1997 paying the amount ordered by the court.