Opinion ID: 2108152
Heading Depth: 1
Heading Rank: 7

Heading: The Bankruptcy Complaint

Text: Respondent first takes exception to a footnote in Judge Rubin's memorandum opinion, in which the judge notes: At the hearing before this court, Byrd criticized the Fourth Circuit's decision for allegedly failing to address one of his grounds for appeal. This court rejects that contention for the reasons set forth by [United States District Court] Judge William Nickerson, in his Memorandum Opinion, entered June 15, 2004, denying Byrd's motion for reconsideration of the remand order. Respondent also takes exception to Judge Rubin's finding in paragraph 28 of the memorandum opinion that: The bankruptcy court had good reason to appoint a Trustee, even though the case had been converted to a reorganization under Chapter 11. Respondent then argues, at some length, that the bankruptcy court improperly appointed a trustee. Neither of these exceptions is relevant to the present disciplinary charges. We therefore do not address either exception. Respondent excepts to Judge Rubin's finding in paragraph 31 of the memorandum opinion that: The court finds [Trustee] Johnson's testimony regarding his efforts to work with Byrd to achieve an orderly administration of the estate to be credible. Mr. Johnson was appointed Chapter 7 Trustee following the withdrawal of Robert Schlossberg, as the original trustee. Respondent challenges Judge Rubin's finding that Mr. Johnson provided credible testimony concerning his efforts to work with Respondent. Respondent directs us to certain testimony of Mr. Johnson and of James Hoffman, who served as counsel for Mr. Schlossberg in his capacity as trustee. In Respondent's view, Hoffman and Johnson's testimony shows that they worked strenuously against the Respondent's Chapter 13 plan and against Respondent's efforts to keep his home. The short answer to this exception is that Judge Rubin was entitled to weigh the testimony and make credibility determinations, based on it. See Attorney Grievance Comm'n v. Mba-Jonas, 402 Md. 334, 344, 936 A.2d 839, 844 (2007). We can and do defer to such credibility assessments. We note, moreover, Mr. Johnson's testimony detailing his efforts to administer the bankruptcy estate. That testimony, credited by Judge Rubin, fully supports the finding that Mr. Johnson worked with Byrd to achieve an orderly administration of the estate. We therefore overrule the exception. Respondent also excepts to the Circuit Court's Finding that Respondent's business reports were false. He characterizes the reports as, at worst, perhaps, somewhat imprecise and amateuristic. He points to certain evidence suggesting that the general pattern of the business reports seemed to be under-reporting of income. Respondent then points out that this evidence conflicts with the argument advanced by Hoffman [] that Respondent was attempting to over-report his income in an attempt to mislead the bankruptcy court into believing Respondent had $117,000.00 in his bank account a[t] the January 25, 2006 confirmation hearing for Respondent's Chapter 13 plan. Respondent argues that there was no showing of a motive for falsifying his business reports, and, consequently, Judge Rubin's finding that Respondent's business reports were `false and that Byrd knew they were false' is not supported by clear and convincing evidence. [14] Judge Rubin did not err in finding that Respondent did not file accurate or complete reports, as required by the Bankruptcy Code. The judge's finding was supported by the testimony of Mr. Hoffman. He testified at some length about Respondent's duty as a Chapter 11 debtor to file monthly operating reports indicating the status of assets coming in, accounts receivable, collections, insurance, and his duty as a Chapter 13 debtor to file monthly operating reports indicating cash flow and expenses of the business in order to determine whether a repayment plan would be feasible. Mr. Hoffman further testified that Respondent failed to provide any information about any income generated while he was in Chapter 11, forcing Mr. Johnson to file monthly operating reports from July 2004 to January 2005 indicating an unknown beginning balance, unknown income, unknown expenses, [and] unknown daily balance. Mr. Hoffman also testified that Respondent's monthly operating reports were grossly inaccurate, [] deceptive and misleading. Judge Rubin, as he was entitled to do, found Hoffman's testimony [regarding the falsity of Byrd's reports] to be highly credible, accurate, and reliable. Based on that testimony, there was sufficient evidence to support Judge Rubin's finding that Respondent's reports to the bankruptcy court were false, and that [he] knew they were false when he filed the reports. Judge Rubin was correct, moreover, in finding that, by willfully filing the false reports, Respondent violated 18 U.S.C. § 1001 (which makes it a crime to falsify or conceal a material fact, or to make a false statement or provide a false document to the government or a government agent), and 18 U.S.C. § 1621 (which prohibits perjury). Finally, Respondent does not dispute the two findings by the bankruptcy court that he was in contempt of court for failing to comply with the court's orders to turn over his financial records to the Trustee. Respondent simply directs us to his testimony that he was attempting at the time to maintain a semblance of a law practice, while dealing with the myriad extant bankruptcy issues and endeavoring in good faith to provide the documents requested by the Trustee. He argues that there was not clear and convincing evidence that his failure to timely provide the discovery was done with the intention to thwart the Trustee. The short answer to Respondent's argument is that we will not examine the propriety of the bankruptcy court's finding Respondent in contempt of court for violating the court's orders pertaining to discovery. Judge Rubin properly accepted those findings of contempt. So do we. Respondent does not directly contest Judge Rubin's findings that the bankruptcy court found him in contempt for (1) failing to comply with the court's orders that he allow the Trustee access to his property and vacate his residence so that it might be sold by the Trustee; and (2) violating the court's injunction enjoining him from taking any other action, including but not limited to filing a lis pendens against the Property, and from filing, pursuing, or maintaining any action in state or other federal court seeking any remedy against the Trustee. Respondent simply argues, instead, that he had the right under the law to attempt to block the sale by filing in state court a complaint seeking a constructive trust against those persons involved in the sale, and by later amending that complaint after the court issued its order enjoining him from doing so. The United States District Court upheld the bankruptcy court's finding that Respondent was in contempt of its order enjoining him from such filings. Further, that court found that Respondent's filing the amended complaint did constitute willfulness and bad faith. Respondent correctly acknowledges that we will not go behind the bankruptcy court's finding of contempt or the United States District Court's decision upholding that finding. Nor, correctly, did Judge Rubin. We therefore accept Judge Rubin's findings concerning those rulings. Judge Rubin concluded, based on the multiple contempt findings, that Respondent violated several rules of professional conduct. The judge concluded that Respondent's willful misconduct in flagrantly disobeying court orders and the rules of the bankruptcy court, manifestly involved dishonesty and was prejudicial to the administration of justice. The conduct violated Rule 8.4(c) & (d). Judge Rubin concluded that Respondent violated MRPC 3.4(c), when he knowingly and intentionally contravened the bankruptcy court's orders to allow access to the property and to vacate the premises. Judge Rubin also concluded that Respondent violated MRPC 8.4(b), (c), and (d) by filing a false business reports in contravention of the law, and, in doing so, made false statements to the bankruptcy court and the Trustee. Other than raising the concerns we addressed and rejected above, Respondent does not argue that the court's conclusions concerning the bankruptcy complaint are wrong as a matter of fact or law. We have reviewed each of Judge Rubin's conclusions of law, in light of the facts he found. We hold, based on that review, that the judge's conclusions of law are supported by clear and convincing evidence.