Court Opinion

ID: 4192980
Source: CourtListenerOpinion
Date Created: 2017-08-03 17:03:37.495427+00
Date Added: 2024-06-11T14:40:25.026164
License: Public Domain

FILED
                                                         OCT 21 2014
 1                         NOT FOR PUBLICATION
                                                     SUSAN M. SPRAUL, CLERK
                                                       U.S. BKCY. APP. PANEL
 2                                                     OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )      BAP No. NV-13-1294-PaJuHl
                                   )
 6   JODY MARIE CUOMO,             )      Bankr. No. 10-14813
                                   )
 7                  Debtor.        )      Adv. Proc. 12-01124
     ______________________________)
 8                                 )
     ANTHONY J. DELUCA, Esq.       )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )      M E M O R A N D U M1
11                                 )
     JODY MARIE CUOMO,             )
12                                 )
                    Appellee.      )
13   ______________________________)
14              Argued and Submitted on September 18, 2014
                           at Las Vegas, Nevada
15
                            Filed - October 21, 2014
16
              Appeal from the United States Bankruptcy Court
17                      for the District of Nevada
18        Honorable Bruce A. Markell, Bankruptcy Judge, Presiding
19
     Appearances:     Christopher Burke argued for appellant Anthony J.
20                    DeLuca; Dennis M. Prince of Prince & Keating LLP
                      argued for appellee Judy Marie Cuomo.
21
22   Before: PAPPAS, JURY and HOULE,2 Bankruptcy Judges.
23
24
          1
             This disposition is not appropriate for publication.
25   Although it may be cited for whatever persuasive value it may
26   have (see Fed. R. App. P. 32.1), it has no precedential value.
     See 9th Cir. BAP Rule 8013-1.
27
          2
             The Honorable Mark D. Houle, Bankruptcy Judge for the
28   Central District of California, sitting by designation.
 1        Attorney Anthony J. DeLuca ("DeLuca") appeals an order of
 2   the bankruptcy court imposing sanctions against him and ordering
 3   a partial disgorgement of fees he received.          We AFFIRM.
 4                                      FACTS
 5                     A.    The Three Bankruptcy Cases
 6        On November 15, 2006, chapter 73 debtor Jodie Marie Cuomo
 7   ("Cuomo") borrowed $96,000, at 6 percent annual interest, from
 8   Patricia Ritchie ("Ritchie") as a personal loan (the "Ritchie
 9   Debt").   Although Cuomo acknowledges the debt, she never made any
10   payments on the Ritchie Debt.
11        Cuomo filed a chapter 7 petition on April 27, 2009.            Bankr.
12   09-16409-BAM (the "First Case").          Ritchie was listed on a
13   creditor list attached to the petition, but with no address.           The
14   First Case was dismissed on June 18, 2009, because Cuomo failed
15   to file schedules.     § 521(I).
16        Cuomo filed a second chapter 7 petition on July 9, 2009.
17   Bankr. 09-22203-BAM (the "Second Case").          In an amended
18   Schedule F, and the list of Cuomo’s creditors filed in the Second
19   Case, Cuomo listed a personal loan she had received from Ritchie
20   of “$100,000"; this debt comprised 17.9 percent of Cuomo's total
21   listed unsecured nonpriority claims.          The Second Case was
22   dismissed on October 27, 2009, this time because Cuomo had
23   apparently failed to comply with prebankruptcy credit counseling
24
25
          3
             Unless otherwise indicated, all chapter and section
26   references are to the Bankruptcy Code, 11 U.S.C. §§ 101–1532, all
27   Rule references are to the Federal Rules of Bankruptcy Procedure,
     Rules 1001–9037, and all Civil Rule references are to the Federal
28   Rules of Civil Procedure 1–86.

                                         -2-
 1   requirements.   § 109(h).4
 2        Represented by DeLuca, Cuomo filed a third chapter 7
 3   petition (the "Third Case") on March 23, 2010.   The Ritchie Debt
 4   was not listed in the mailing matrix or schedules originally
 5   filed in connection with the Third Case.   After the trustee filed
 6   a no asset report, discharge was granted on July 1, 2010, and the
 7   Third Case closed on July 16, 2010.
 8        Ritchie assigned the Ritchie Debt to George Kelly ("Kelly")
 9   in October 2011.   Kelly promptly sued Cuomo for breach of
10   contract in Nevada state court to collect the Ritchie Debt (the
11   "State Court Action").
12        On April 12, 2012, DeLuca filed a "Motion to Reopen
13   Chapter 7 Case Combined with Motion for Order to Show Cause Why
14   Sanctions Should Not be Imposed against Gregory Kelly" (the
15   "Reopen Motion") in the Third Case.   Then, on April 29, 2012,
16   DeLuca assisted Cuomo in filing an amended Schedule F (the
17   “Amended Schedule F”) which indicated that she had an unsecured
18   debt for a $96,000 personal loan from Ritchie; this debt
19   comprised over half of the total unsecured nonpriority claims
20   listed in Amended Schedule F.
21        The bankruptcy court heard the parties on the Reopen Motion
22   on May 10, 2012.   Kelly appeared pro se and Cuomo was represented
23
24
25
26        4
             Two attorneys from the “Nevada Law Group,” not DeLuca,
27   represented Cuomo in the First Case and Second Case. The
     bankruptcy court later sanctioned the two attorneys under Civil
28   Rule 11/Rule 9011 and ordered them to disgorge their fees.

                                     -3-
 1   by G. Layne Nordstrom of the Nordstrom Law Office.5    The court
 2   granted the motion to reopen the bankruptcy case, and ruled that
 3   Kelly had violated the discharge injunction.    However, the court
 4   also decided that Kelly had acted in good faith in pursuing the
 5   State Court Action, and so declined to sanction him:
 6        What I’m going to do is I’m not going to order
          sanctions because you proceeded in good faith. But at
 7        the same time, I can’t let stand the actions that you
          have already obtained. You need to come into this
 8        court . . . and get a determination that the debt is
          nondischargeable on a going-forward basis. . . . And
 9        I’ll open the case. I’ll leave the case open for you
          to — I’ll give you 30 days to do that.
10
11   Hr’g Tr. 8:5-12, May 10, 2012.
12                       B.   The Adversary Proceeding
13        Kelly commenced an adversary proceeding against Cuomo on
14   June 15, 2012.    In the complaint, Kelly sought an exception to
15   discharge for the Ritchie Debt pursuant to § 523(a)(2)(A), and
16   denial of discharge pursuant to §§ 727(a)(2)(A), (a)(2)(B),
17   (a)(3), (a)(4)(A), and (a)(5).
18        DeLuca alleges that Cuomo declined his offer to represent
19   her in the adversary proceeding; on June 28, 2012, he sent Cuomo
20   a letter confirming he was not representing her in the action,
21   reminding her of the first court appearance date, and
22   recommending she seek other counsel.
23        Cuomo, acting pro se, filed an answer to the Kelly complaint
24   on October 24, 2012, generally denying all of its allegations.
25   Then, on January 9, 2013, Cuomo filed a motion for summary
26   judgment.    Briefs and supplemental briefs were filed by both
27
          5
28            Nordstrom was an appearance counsel for DeLuca.

                                       -4-
 1   Kelly and Cuomo.   Kelly did not appear at the summary judgment
 2   hearing on February 26, 2013.   The bankruptcy court entered a
 3   partial summary judgment in favor of Cuomo on April 1, 2013,
 4   dismissing the § 727 denial of discharge claims, but directing
 5   that a trial proceed on the § 523(a)(2)(A) exception to discharge
 6   fraud claim.
 7        In the summary judgment motion, Cuomo alleged that she had
 8   informed DeLuca about the existence of the Ritchie Debt before
 9   filing the Third Case, and that he had given her a copy of a
10   pre-filing Schedule F to review which listed the Ritchie Debt.
11   Based on these allegations, on March 11, 2013, the bankruptcy
12   court issued its "Order to Show Cause Why Attorney Anthony J.
13   DeLuca Should Not Be Sanctioned for Failing to List a Known Debt
14   on Debtor's Bankruptcy Schedules and Failing to Represent Debtor
15   in this Adversary Proceeding" (the "Initial OSC").   The Initial
16   OSC ordered DeLuca to explain whether:
17        (1) he performed competently by failing to list the
          Ritchie Debt in the Third Petition in light of Cuomo's
18        allegation that he was previously aware of the debt and
          of the Second [Case’s] scheduling of the debt; (2) he
19        had charged for his services to reopen the case and
          amend the schedules and, if so, why he had not filed a
20        supplemental Rule 2016(b) statement of compensation;
          (3) any additional fees were reasonable in the amount;
21        and (4) nonrepresentation in the adversary proceeding
          was reasonable and whether Cuomo had given informed
22        consent to representation only in the main bankruptcy
          case.
23
24   The Initial OSC also informed DeLuca that the bankruptcy court
25   harbored concerns about his compliance with Nev. R. Prof’l
26   Conduct (“Nev. R.”) 1.1 (failure to meet threshold level of skill
27   and thoroughness), Nev. R. 1.2 (limitation on services must be
28   reasonable and with consent), Nev. R. 1.5 (fees must be

                                     -5-
 1   reasonable), and Rule 2016(b) (requiring disclosure of
 2   compensation paid to a debtor’s attorney).    The court set a
 3   hearing on the Initial OSC for April 2, 2013.
 4        DeLuca filed a response to the Initial OSC on March 25,
 5   2013, arguing that he had provided Cuomo with a copy of her
 6   current credit report and, before she signed the Schedule F that
 7   he prepared and filed in the Third Case, Cuomo had reviewed it
 8   for accuracy.   DeLuca denied that he provided to Cuomo for her
 9   review any Prefiling Schedule F that included the Ritchie Debt,
10   and he accused his former client of seeking to mislead the
11   bankruptcy court.   Finally, DeLuca represented that he was not
12   compensated for any of the post-discharge legal services he
13   provided to Cuomo and, thus, there was no need to amend his
14   otherwise accurate Rule 2016(b) disclosure filed in the Third
15   Case.
16        On March 27, 2013, the bankruptcy court amended the OSC (the
17   “Amended OSC”).   In addition to the directions in the Initial
18   OSC, the court now required that DeLuca also be prepared to
19   explain at the hearing why he did not list the Ritchie Debt in
20   the Original Schedule F, although it had been previously listed
21   in the Schedule F filed in the Second Case.    In addition to the
22   Nevada Rules and Rule 2016(b), the Amended OSC warned that
23   DeLuca's performance may also have violated § 707(b)(4)(C)(I)
24   (requiring that a debtor’s attorney "perform a reasonable
25   investigation into the circumstances that gave rise to the
26   petition").
27        DeLuca filed a response to the Amended OSC on March 29,
28   2013.   DeLuca argued that he should not be required to review the

                                     -6-
 1   schedules in Cuomo’s previous bankruptcy cases, especially in
 2   light of the poor quality of those previous petitions and
 3   schedules.    Additionally, DeLuca suggested that the bankruptcy
 4   court was targeting him for sanctions and was ignoring evidence
 5   that Cuomo was perpetrating a fraud on the court by alleging the
 6   existence of the Prefiling Schedule F.
 7        At the hearing on April 2, DeLuca and Cuomo appeared.      When
 8   asked by the bankruptcy court if he intended to offer evidence or
 9   other arguments, DeLuca indicated that he would rely on his
10   submitted papers, but would answer any questions from the
11   bankruptcy court.    When Cuomo asked to be put under oath to
12   testify, the court explained to her that, if she testified, she
13   would be subject to cross-examination.    The court instead
14   permitted Cuomo to read a statement into the record, not under
15   oath.    DeLuca responded to the statement.   The court took the
16   matter under submission.6
17        On June 20, 2013, the bankruptcy court filed its "Opinion
18
19        6
             Before the bankruptcy court reached a decision on the
20   Amended OSC, in an unrelated proceeding, on April 9, 2013, the
     same bankruptcy judge entered an "Opinion Sanctioning Attorney
21   Anthony J. DeLuca for Failing to Represent Wayne A. Seare in This
22   Adversary Proceeding [12-1108-BAM]" (the "Seare Opinion").
     Dignity Health v. Seare (In re Seare), 493 B.R. 158 (Bank. D.
23   Nev. 2013), aff'd, DeLuca v. Seare (In re Seare), 515 B.R. 599
     (9th Cir. BAP 2014). Based on bias against him which he alleged
24
     was evident from comments made in the Seare Opinion, DeLuca filed
25   a motion in the Cuomo adversary proceeding to recuse the
     bankruptcy judge. Judge Markell referred the recusal motion to
26   the Chief Judge of the Nevada Bankruptcy Court. Chief Judge
27   Nakagawa heard the motion on May 29, 2013, and entered an order
     and eleven-page memorandum denying the recusal motion on June 3,
28   2013.

                                      -7-
 1   Sanctioning Attorney Anthony J. DeLuca for Failing to Schedule a
 2   Known Debt and Granting His Motion to Withdraw as Counsel for
 3   Jody Marie Cuomo" (the "Sanction Opinion").    The court began the
 4   Sanction Opinion with several factual findings.
 5        First, the bankruptcy court discussed the dispute between
 6   Cuomo and DeLuca concerning the alleged Prefiling Schedule F.
 7   Cuomo argued that DeLuca’s staff gave her a copy of the Prefiling
 8   Schedule F that included the Ritchie Debt, which Cuomo argued was
 9   evidence that she had provided information to him about that debt
10   before DeLuca filed the petition in the Third Case.   The court
11   found that the Prefiling Schedule F was actually a copy of the
12   Amended Schedule F that was filed postpetition:
13        This does not necessarily mean, however, that Cuomo
          acted in bad faith by asserting otherwise. The court
14        believes that she entered DeLuca’s office in November
          2012 and asked for a copy of the prefiling draft [of
15        Schedule F] and that the secretary gave her the then-
          current [Amended Schedule F]. In other words, Cuomo
16        believed this document to be what she purported it to
          be based on the response from DeLuca’s office staff.
17        That being said, the court does not believe that
          DeLuca, or his staff, acted in bad faith either by
18        giving her the [Amended Schedule F]. It was likely the
          document most readily available, and possibly DeLuca
19        did not have a copy of the [Prefiling Schedule F]
          available.
20
21   Sanction Opinion at 12.
22        The other factual issue examined by the bankruptcy court
23   concerned the degree of personal attention that DeLuca gave to
24   Cuomo’s representation.   In its decision, based on the
25   uncontradicted statements of Cuomo, "the court finds that DeLuca
26   never personally met with Cuomo, or even talked with her over the
27   phone, during the course of representation."   Sanction Opinion at
28

                                     -8-
 1   13.7
 2          The bankruptcy court began its legal analysis in the
 3   Sanction Opinion by rejecting DeLuca's suggestion that the
 4   bankruptcy judge was targeting DeLuca for sanctions, relying on
 5   Chief Judge Nakagawa's denial of DeLuca's motion to recuse in the
 6   adversary proceeding.8
 7          The bankruptcy court then determined that DeLuca had
 8   violated Nev. R. 1.1 because he had a duty to review the previous
 9   bankruptcy petitions and schedules that Cuomo had filed in her
10   First Case and Second Case.      The court reasoned:
11          Had he done so, he would have discovered that the
            [Ritchie Debt] was still owing and would have scheduled
12          it (assuming with little doubt that Cuomo would have
            agreed to schedule it). She thus would have benefitted
13          from Rule 4007's deadline for dischargeability
            complaints and she may not be embroiled in this
14          adversary proceeding.
15   Sanctions Opinion at 21.
16          As to DeLuca’s possible violation of Nev. R. 1.2(c)
17   (limitation on services must be reasonable and with consent), the
18   bankruptcy court distinguished the Third Case from the factual
19   situation in another recent case involving DeLuca and the
20   bankruptcy judge, In re Seare, where DeLuca had purported to
21   exclude representation of the debtor in adversary proceedings
22   from his flat fee and completely refused to provide the extra
23   services.     493 B.R. at 190.   In this case, the court noted,
24
25
            7
                DeLuca has not challenged this factual finding in this
26   appeal.
27          8
             In this appeal, DuLuca has not continued his argument
28   that the bankruptcy court was biased.

                                        -9-
 1   DeLuca had offered to represent Cuomo in the adversary
 2   proceeding, but she declined his continued services because they
 3   were unaffordable.   On this record, the bankruptcy court found
 4   that DeLuca did not violate Nev. R. 1.2(c).    Sanction Opinion at
 5   21-22.
 6         Since DeLuca did not charge or receive any fees for
 7   post-discharge work, the bankruptcy court also ruled that DeLuca
 8   did not violate Nev. R. 1.5 or Rule 2016(b).   Sanction Opinion at
 9   22.
10         Finally, the bankruptcy court ruled that DeLuca had not
11   performed a meaningful independent investigation into the
12   circumstances giving rise to Cuomo's bankruptcy petition and had
13   violated § 707(b)(4)(C)(I):
14         He only reviewed past filings to determine her
           eligibility without any review of her past schedules.
15         He relied solely on the information she provided about
           her creditors. Broadly put, the circumstance that
16         drove her to bankruptcy was total debt of approximately
           $160,000 [], only about $60,000 of which appeared on
17         the Third Petition. Had he performed a reasonable
           investigation by reviewing the prior petition, he would
18         have discovered that about one-third of her debt did
           not appear on the Third Petition. . . . Cuomo did
19         everything that DeLuca told her to do. She reviewed
           the draft petitions in good faith and unfortunately
20         failed to spot the omitted Ritchie Debt. As under
           Nevada Rule 1.1, DeLuca nonetheless had the affirmative
21         duty under Section 707(b)(4)(C) to go beyond the
           information provided by Cuomo and, at the very least,
22         to ask why the Ritchie Debt was omitted. For these
           reasons, DeLuca violated Section 707(b)(4)(C).
23
24   Sanction Opinion at 24.
25         As a sanction for DeLuca's violation of Nev. R. 1.1 and
26   § 707(b)(4)(C), pursuant to its inherent authority under
27   § 105(a), and under § 329(b) and § 526(c), the bankruptcy court
28   ordered DeLuca to disgorge $851.00 of the total fees he received

                                     -10-
 1   from Cuomo of $1,499.   The court justified this amount by
 2   reasoning that the disgorgement was 56.8 percent of his flat fee,
 3   which reflected that the Ritchie Debt of $96,000 was 56.8 percent
 4   of her total scheduled unsecured nonpriority debt of $168,958.
 5   Sanction Opinion at 32.9
 6        DeLuca attempted to appeal the Sanction Opinion on June 24,
 7   2013; however, the Panel remanded the matter to the bankruptcy
 8   court on July 12, 2013, for entry of an order effectuating the
 9   Sanction Opinion.   An "Order on Proceeding to Show Cause Why
10   Attorney Anthony J. DeLuca Should Not Be Sanctioned for Failing
11   to List a Known Debt on Debtor's Bankruptcy Schedules and Failing
12   to Represent Debtor in this Adversary Proceeding" was entered on
13   July 17, 2013.   DeLuca filed a timely appeal.10
14                               JURISDICTION
15        The bankruptcy court had jurisdiction under 28 U.S.C.
16   §§ 1334 and 157(b)(2)(A).   The Panel has jurisdiction under
17   28 U.S.C. § 158.
18                                  ISSUES
19        Whether the bankruptcy court violated DeLuca's due process
20   rights.
21        Whether the bankruptcy court abused its discretion in
22
23        9
             The Sanction Opinion and subsequent order also granted
24   DeLuca's request to withdraw as counsel to Cuomo.
          10
25           In their appellate briefs, the parties note that, after
     the filing of this appeal, DeLuca asked the bankruptcy court to
26   seal the Sanction Opinion. The bankruptcy court denied DeLuca’s
27   motion on July 1, 2013. DeLuca did not amend the notice of
     appeal to include this denial, nor has he argued that the order
28   denying the sealing was improper.

                                     -11-
 1   imposing sanctions on DeLuca.

 2                           STANDARDS OF REVIEW

 3        Whether procedures used by the bankruptcy court violated an

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

 5   fact that we review de novo.    Willborn v. Gallagher

 6   (In re Willburn), 205 B.R. 202, 206 (9th Cir. BAP 1997) (citing

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

 8        A bankruptcy court's decision to impose sanctions is

 9   reviewed for abuse of discretion.        In re Nguyen, 447 B.R. 268,

10   276 (9th Cir. BAP 2011) (en banc); accord Chambers v. NASCO,

11   Inc., 501 U.S. 32, 55 (1991).    The bankruptcy court's choice of

12   sanctions is also reviewed for abuse of discretion.         U.S. Dist.

13   Ct. for E.D. Wash. v. Sandlin, 12 F.3d 861, 865 (9th Cir. 1993).

14   A sanction order directing disgorgement of an attorney's fees is

15   reviewed for abuse of discretion.        Hale v. U.S. Tr.

16   (In re Basham), 298 B.R. 926, 930 (9th Cir. BAP 1997), aff'd,

17   152 F.3d 924 (9th Cir. 1998).    A bankruptcy court abuses its

18   discretion if it applies an incorrect legal standard, misapplies

19   the correct legal standard, or if its factual findings are

20   illogical, implausible or without support from evidence in the

21   record.   TrafficSchool.com v. Edriver Inc., 653 F.3d 820, 832

22   (9th Cir. 2011) (citing United States v. Hinkson, 585 F.3d 1247,

23   1262 (9th Cir. 2009)(en banc)).

24                               DISCUSSION

25        The bankruptcy court determined that DeLuca violated Nev.

26   R. 1.1 and § 707(b)(4)(C), and it sanctioned him.        We find no

27   abuse of discretion in the court's decisions.

28

                                       -12-
 1                                    I.
 2   The bankruptcy court did not violate DeLuca's due process rights.
 3        The bulk of DeLuca's arguments in this appeal concern his
 4   contention that the bankruptcy court did not treat him fairly,
 5   and violated his right to due process, in the sanction
 6   proceedings.   In particular, DeLuca suggests three ways in which
 7   his due process rights were abused: (1) the bankruptcy court
 8   provided insufficient notice to DeLuca concerning the basis for
 9   the possible sanctions and did not allow him adequate time to
10   prepare a response; (2) the court did not hold an evidentiary
11   hearing; and (3) the court did not consider expert testimony
12   before finding that DeLuca had breached his duties to Cuomo.
13        A.   Notice.   As to the fairness of the notice given to him,
14   DeLuca argues that:
15        To satisfy due process, a bankruptcy court must
          determine that the party to be sanctioned was provided
16        sufficient notice of the potential sanctions under
          § 105(a). [Deville v. Cardinale (]In re Deville[)],
17        280 B.R. 483, 497-97 (9th Cir. BAP 2004) ("Generally,
          the bankruptcy court's power to sanction attorneys must
18        specify the authority for the sanction, as well as the
          sanctionable conduct."). Id. at 496.
19
20   Deluca Op. Br. at 12.
21        Sanctions for an attorney's unprofessional conduct implicate
22   a court's inherent powers.   Jackson v. United States, 881 F.2d
23   707, 711 (9th Cir. 1988) (“[A]ll courts possess an inherent power
24   to prevent unprofessional conduct by those attorneys who are
25   practicing before them.   This authority extends to any
26   unprofessional conduct[.]”); accord In re Snyder, 472 U.S. 634,
27   645 n.6 (1985) (noting that the state code of professional
28   responsibility did not by its own terms apply to attorney

                                      -13-
 1   sanctions in the federal courts, but that federal courts in
 2   exercising their inherent power under the standards imposed by
 3   federal law may charge attorneys with the knowledge of, and
 4   conformity to, the state codes).
 5        The decision in In re Deville stands for precisely the
 6   opposite position suggested by DeLuca.     In Deville, the
 7   bankruptcy court issued two orders to show cause to an attorney
 8   as to why he should not be sanctioned for removing an action to
 9   the bankruptcy court to harass a plaintiff and cause unnecessary
10   delay and expenses in state court proceedings.     Both orders
11   described the alleged objectionable conduct.     But on appeal of
12   the sanctions order, the sanctioned attorney argued that "notice
13   was deficient because the bankruptcy court . . . did not
14   specifically state that it was also considering exercising its
15   inherent authority."     Id. at 497.
16        The BAP in Deville reasoned that the bankruptcy court had
17   described the objectionable conduct and "the Appellants were also
18   given the opportunity to respond in writing, and to appear and
19   testify at a hearing.     This notice satisfied due process, and
20   placed Appellants on notice that the court's inherent authority
21   was implicated."   Id.
22        Similar to the Panel's reasoning in Deville, we conclude
23   that the bankruptcy court was not required to explicitly inform
24   DeLuca that it was preparing to sanction him under the court's
25   inherent powers.   The title to the two show cause orders warned
26   DeLuca that the bankruptcy court was considering the imposition
27   of sanctions against him.     The bankruptcy court clearly
28   identified the objectionable behavior in both OSCs as

                                       -14-
 1   unprofessional behavior in violation of, among other rules, Nev.
 2   R. 1.1 and § 707(b)(4)(C), violations properly addressed by the
 3   court's inherent powers.   Snyder, 472 U.S. at 645 n.6 (1985).
 4   Like the Deville case, the bankruptcy court directed DeLuca to
 5   respond to the OSCs and to include any "admissible evidence" to
 6   be presented at the hearing.   DeLuca responded to both the OSCs,
 7   attached evidence, and appeared at the hearing.   We conclude the
 8   notice given to DeLuca concerning the sanctions proceedings
 9   satisfied due process requirements.
10        A variation on DeLuca's notice argument is that the
11   bankruptcy court gave him insufficient time to consider whether
12   he should be subject to sanctions for violating
13   § 707(b)(4)(C)(i).   DeLuca is apparently not arguing that the
14   bankruptcy court failed to notify him that sanctions would be
15   considered under the Bankruptcy Code, rather than the
16   professional rules or Bankruptcy Rules.   Instead, DeLuca’s
17   objection is simply that the Amended OSC containing the court's
18   direction that he be prepared to address § 707(b)(4)(C) was given
19   to him only six days before the hearing on the OSCs.11
20        "The fundamental question related to due process is whether
21   Appellants received any type of notice that was reasonably
22   calculated under all the circumstances to apprise them of the
23   pendency of the action and afford them an opportunity to present
24   their objections."   Mullane v. Central Hanover Bank & Trust Co.,
25
26        11
              At the hearing before the Panel, counsel for DeLuca
27   conceded that DeLuca had adequate knowledge of the nature of the
     court’s concerns, but only objected to the lack of time to
28   respond.

                                     -15-
 1   339 U.S. 306, 314 (1950).    In applying Mullane in this circuit,
 2   the Ninth Circuit has consistently held that one cannot establish
 3   a violation of his due process rights without first establishing
 4   that he was prejudiced by the alleged denial of due process.
 5   When a party offers no evidence of prejudice, any deficiency in
 6   providing due process to that party is harmless.   Rosson v.
 7   Fitzgerald (In re Rosson), 545 F.3d 764, 776 (9th Cir. 2008);
 8   City Equities Anaheim, Ltd. v. Lincoln Plaza Dev. Corp.
 9   (In re City Equities Anaheim, Ltd.), 22 F.3d 954, 959 (9th Cir.
10   1994).
11        Beyond complaining that he had only six days to prepare his
12   response to the additional § 707(b)(4)(C) charge, DeLuca has
13   shown no prejudice.   Indeed, DeLuca fails to acknowledge that he
14   had sufficient time to address the Amended OSC in an eight-page
15   response, plus fourteen pages of exhibits.   Further, at the
16   hearing on the OSCs, DeLuca replied to the bankruptcy court's
17   offer to make a statement with the comment, "I have nothing
18   further to submit other than what's been pled through the
19   pleadings."   Hr'g Tr. 3:13-15, April 2, 2013.   Notably, neither
20   in his responsive papers nor at the bankruptcy court hearing did
21   DeLuca suggest that he had insufficient time to address
22   § 707(b)(4)(C)(I), nor did he request more time to consider the
23   issue.    We conclude that DeLuca was not prejudiced by the six-day
24   notice of the Amended OSC.
25        B.   Evidentiary hearing.   DeLuca cites to three cases to
26   support his position that the bankruptcy court was required to
27   hold an evidentiary hearing in these sanctions proceedings:
28   Lentino v. Fringe Employee Plans, Inc., 611 F.2d 474, 484

                                      -16-
 1   (3d Cir. 1979); Bonhiver v. Rotenberg, Schwartzman Richards,
 2   461 F.2d 925 (7th Cir. 1972); and Royal Ins. Co. Of Am. v. Miles
 3   & Stockbridge, PC, 138 F.Supp.2d 695, 700 (D. Md. 2001).    But
 4   none of these cases deal with sanctions; they are all legal
 5   malpractice cases.
 6        Here, as she clearly indicated to the bankruptcy court,
 7   Cuomo was not asserting a legal malpractice claim against DeLuca:
 8   "It was no one's intent to get Mr. DeLuca in trouble with the
 9   court, merely to defend myself in the case Mr. Kelly filed
10   concerning Pat Richie."   Hr'g Tr. 17:18-20.   In addition, the
11   OSCs issued by the bankruptcy court described the nature of the
12   sanctions proceedings and the specific sanctions the court might
13   impose.   Simply put, this was not a malpractice action; it was
14   initiated by the bankruptcy court solely to determine, based on
15   DeLuca’s conduct in this case, whether he should be sanctioned
16   under the bankruptcy court's inherent powers and the Bankruptcy
17   Code.
18        The Ninth Circuit has unambiguously ruled that evidentiary
19   proceedings are not required in sanctions proceedings, and
20   whether to require such a hearing is a matter committed to the
21   discretion of the trial court.
22        When necessary, the district court may hold an
          evidentiary hearing on a motion for sanctions." Wyle
23        v. R.J. Reynolds Indus., Inc., 709 F.2d 585, 592 (9th
          Cir. 1983). Hence, the district court has the
24        discretion, but is not required, to hold an evidentiary
          hearing prior to imposing sanctions on a party.
25
26   Lambright v. Ryan, 698 F.3d 803, 825-26 (9th Cir. 2012).    The
27   Lambright court went beyond this general principle to rule that a
28   party's due process rights in a sanction proceeding do not

                                      -17-
 1   require an evidentiary hearing.
 2        Indeed, in cases in which the sanctioned party argued
          that it was deprived of due process because the
 3        district court failed to conduct an evidentiary hearing
          . . . we have held that "[t]he opportunity to brief the
 4        issue fully satisfies due process requirements." Pac.
          Harbor Capital, Inc. v. Carnival Air Lines, Inc.,
 5        210 F.3d 1112, 1118 (9th Cir. 2000).
 6   Lambright, 698 F.3d at 825-26; see also, Molski v. Evergreen
 7   Dynasty Corp., 500 F.3d 1047, 1058-59 (9th Cir. 2007) (“in a case
 8   involving sanctions levied against an attorney, . . . an
 9   opportunity to be heard does not require an oral or evidentiary
10   hearing on the issue, instead . . . the opportunity to brief the
11   issue fully satisfies due process requirements").
12        Finally, as discussed earlier, DeLuca never requested an
13   evidentiary hearing.   At the hearing on April 2, 2013, the court
14   informed the parties how it wished to proceed:
15        THE COURT: I’m open to the way to conduct this, but
          the best way I would think would be to have you respond
16        with anything beyond what you have in writing and then
          to the extent that either Ms. Cuomo or Mr. Kelly wants
17        to say anything, they may, and then I’ll have you have
          a reply.
18
          DELUCA: I have nothing further to submit other than
19        what’s been pled through the pleadings, but I’ll
          reserve the right to reply.
20
21   Hr’g Tr. 3:9–16.
22        In short, DeLuca not only did not request an evidentiary
23   hearing, he was given the opportunity by the court to expand on
24   his pleadings, but rested on those pleadings.
25        DeLuca challenges in this appeal the court’s finding that he
26   never communicated personally or by telephone, alleging that the
27   only source for that information was the statement read into the
28   record at the hearing by Cuomo: “This despite the fact that I’ve

                                       -18-
 1   never even talked to Mr. DeLuca personally [] nor have I ever
 2   seen him[.]”    Hr’g Tr. 18:6–8.    Since this was not an evidentiary
 3   hearing, and Cuomo’s statement was not under oath, DeLuca
 4   suggests that the court could not base its finding that DeLuca
 5   never met with his client on that statement.
 6        Under the terms of the hearing set up by the court and
 7   agreed to by DeLuca, Cuomo could present further argument and
 8   DeLuca explicitly “reserve[d] the right to reply.”     Hr’g
 9   Tr. 3:16.    DeLuca made an extended reply to Cuomo’s statement,
10   countering in detail her allegations regarding the Prefiling
11   Schedule F, but was conspicuously silent regarding her statement
12   that he had no personal contact with her.     Under these
13   circumstances, it was certainly within his knowledge and without
14   the need for preparation to state on the record if he had such
15   personal contacts.
16        The bankruptcy court did not abuse its discretion when it
17   did not conduct an evidentiary hearing in this sanctions
18   proceeding.
19        C.   Expert testimony.    DeLuca also argues that expert
20   testimony was required for the bankruptcy court to measure the
21   propriety of his actions.     The cases he cites for this
22   proposition, again, concern claims for legal malpractice, not
23   sanctions.
24        The principal case relied upon by DeLuca, Fishow v. Simpson,
25   55 Md. App. 312 (Md. Ct. App. 1983), concerned a malpractice
26   claim where the lawyer "allegedly failed to adequately
27   investigate, ascertain and present to the court medical evidence"
28   regarding drug interactions and psychatric conditions.      Id. at

                                        -19-
 1   545.    While, considered in context, we can well understand the
 2   appellate court's ruling that, "under the facts of this case,"
 3   expert testimony involving drug and psychiatric issues would be
 4   beyond the common knowledge of a trial judge or jury such that
 5   expert testimony would be required before the fact-finder could
 6   decide whether the lawyer misperformed.       But we do not consider
 7   such abstruse subjects here.
 8          The proper standard of diligence to be observed by a
 9   debtor’s attorney in representing his client in preparing the
10   schedules in a fairly simple bankruptcy case is a matter clearly
11   within the knowledge of an experienced bankruptcy judge such as
12   the one presiding in this case.     It must be remembered that
13   bankruptcy judges only deal with bankruptcy cases.       As a result,
14   bankruptcy judges have special expertise in bankruptcy law in
15   general, and in particular, in evaluating the services performed
16   by the bankruptcy attorneys appearing in their courts, sometimes
17   on a daily basis.    United States v. Camino Real Landscape Contr.,
18   Inc. (In re Camino Real Landscape Contr., Inc.), 882 F.2d 1503,
19   1508 (9th Cir. 1987) (relying on the expertise of the bankruptcy
20   court and its “almost daily” experience in bankruptcy-related
21   matters).
22          Where the trier of fact is reasonably well equipped to
23   interpret the facts without enlightenment from experts, expert
24   testimony is superfluous.    Boleman Law Firm, PC v. U.S. Tr.,
25   355 B.R. 548, 555 (E.D. Va. 2007).       This is such a case.   It was
26   not an abuse of discretion for the bankruptcy court to not
27   consider expert testimony concerning whether DeLuca acted
28   appropriately in representing Cuomo.

                                       -20-
 1        We conclude that the bankruptcy court did not violate the
 2   due process rights of DeLuca.
 3                                   II.
 4                 The bankruptcy court did not abuse its
                      discretion in sanctioning DeLuca.
 5
 6        "Bankruptcy courts have the inherent authority to regulate
 7   the practice of attorneys who appear before them."        In re Nguyen,
 8   447 B.R. at 280 (citing Chambers v. NASCO, Inc., 501 U.S. at
 9   43-45); Caldwell v. Unified Capital Corp. (In re Rainbow
10   Magazine, Inc.), 77 F.3d 278, 284–85 (9th Cir. 1996)).
11   Bankruptcy courts have express authority under the Code and the
12   Rules, and under its inherent authority, to sanction attorneys.
13   Price v. Lehtinen (In re Lehtinen), 564 F.3d 1052, 1058 (9th Cir.
14   2009).   The bankruptcy court has "wide discretion in determining
15   the amount of a sanctions award."      Orton v. Hoffman
16   (In re Kayne), 453 B.R. 372, 386 (9th Cir. BAP 2011).
17        All attorneys practicing in the district and bankruptcy
18   courts of the District of Nevada are subject to the Nevada Rules
19   of Professional Conduct:
20        An attorney admitted to practice pursuant to any of
          these Rules shall adhere to the standards of conduct
21        prescribed by the Model Rules of Professional Conduct
          as adopted and amended from time to time by the Supreme
22        Court of Nevada, except as such may be modified by this
          Court. Any attorney who violates these standards of
23        conduct may be disbarred, suspended from practice
          before this Court for a definitive time, reprimanded or
24        subjected to such other discipline as the Court deems
          proper. This subsection does not restrict the Court's
25        contempt power.
26   Nev. Dist. Ct. Local R. IA 10-7, made applicable by Nev. Bankr.
27   Ct. Local R. 1001.
28        The Nevada Rules of Professional Conduct are based on, and

                                     -21-
 1   generally identical to, the ABA Model Rules of Prof’l Conduct
 2   (“ABA Model Rule[s]”).    Courts may consult the ABA Model Rules
 3   and the official comments "for guidance to construe the Nevada
 4   Rules of Professional Conduct."      Nev. Sup. Ct. R. 150; Edwards v.
 5   360 Communs., 189 F.R.D. 433, 434-45 (D. Nev. 1999).
 6        The bankruptcy court sanctioned DeLuca under its inherent
 7   powers because it determined that DeLuca violated Nev. R. 1.1.
 8   Under that rule, which is identical to the corresponding ABA
 9   Model Rule, "[a] lawyer shall provide competent representation to
10   a client.   Competent representation requires the legal knowledge,
11   skill, thoroughness and preparation reasonably necessary for the
12   representation."    Nev. R. 1.1.
13        The bankruptcy court also sanctioned DeLuca under
14   § 707(b)(4)(C).    This Code provision, added by BAPCPA in 2005,
15   provides that:    "The signature of an attorney on a [Chapter 7]
16   petition . . . shall constitute a certification that the attorney
17   has . . . performed a reasonable investigation into the
18   circumstances that gave rise to the petition."     In applying this
19   provision, the bankruptcy court acknowledged this Panel’s
20   decision holding that, "[t]he "reasonable investigation" under
21   this section is indistinct from the "reasonable inquiry" under
22   Rule 9011, and Rule 9011 case law is applicable.     In re Kayne,
23   453 B.R. at 381.
24        In reviewing attorney disciplinary sanctions, we determine
25   whether (1) the disciplinary proceeding was fair, (2) the
26   evidence supports the findings, and (3) the penalty imposed was
27   reasonable.   In re Nguyen, 447 B.R. at 276.    As discussed in the
28   preceding section, we find that the proceeding was fair and did

                                        -22-
 1   not violate DeLuca's due process rights.    We examine the second
 2   and third In re Nguyen factors below.
 3        A.   The evidence supported the sanctions.   The bankruptcy
 4   court's Sanction Opinion sets forth a discussion of the case law
 5   regarding the meaning and effect of Nev. R. 1.1. and
 6   § 707(b)(4)(C), and then explains their application to the facts
 7   of this case.   The bankruptcy court’s analysis is sound.
 8        Under Nev. R. 1.1, the central factual inquiry is whether a
 9   lawyer provides competent representation to the client.      Cudzey
10   v. State, 747 P.2d. 233, 236 (Nev. 1987).    There is no precise
11   definition of “competence” under either Nevada or federal law,
12   but relevant factors include the lawyer's training, experience
13   and preparation.   ABA Model R. 1.1 cmt. 5 ("Competent handling of
14   a legal matter includes inquiry into and analysis of the factual
15   and legal elements of the problem, and use of methods and
16   procedures meeting the standards of competent practitioners.");
17   Cudzey, 747 P.2d. at 236.
18        A debtor is duty-bound to file accurate lists of creditors
19   and schedules of assets and liabilities.    § 521(a)(1)(A), (B);
20   Rule 1007(b)(1)(A).   The bankruptcy schedules play a critical
21   role in providing the information necessary for the commencement
22   and administration of a bankruptcy case.    In particular,
23   Schedule F lists all of the debtor’s nonpriority unsecured
24   creditors, and those names are then generally included in the
25   list of creditors submitted by the debtor to the clerk so that
26   those creditors can be notified about the commencement of, and
27   other important information about, the debtor’s bankruptcy case.
28   Understandably, then, in satisfying the debtor’s duties, a

                                     -23-
 1   debtor's attorney "bears a significant degree of responsibility
 2   in assuring to the best of his or her ability that the schedules
 3   are complete and accurate before they are filed.”     U.S. Tr. v.
 4   Lynn (In re Bellows-Fairchild), 322 B.R. 675, 680 (Bankr. D. Ore.
 5   2005).   As one leading treatise on bankruptcy law succinctly
 6   notes:
 7        In the preparation of the schedules nothing should be
          taken for granted. The attorney should carefully
 8        investigate the affairs of the debtor and make certain
          that the attorney has all the information needed to
 9        prepare full and complete schedules, for it is the duty
          of the debtor to present intelligible and true
10        schedules.
11   4 COLLIER ON BANKRUPTCY ¶521.03[3] (Alan N. Resnick & Henry J.
12   Sommer eds., 16th ed. 2014).
13        The bankruptcy court determined that the Retainer Agreement
14   between Cuomo and DeLuca "went too far" in transferring all
15   responsibility for the accuracy of information to Cuomo.     An
16   attorney cannot by contract limit the scope of his duties.
17   In re McKain, 325 B.R. 843, 849 (Bankr. D. Neb. 2005) (“a
18   debtor’s attorney bears a significant degree of responsibility in
19   assuring to the best of his or her ability that the schedules are
20   complete and accurate before they are filed.”); see also
21   Restatement (Second) of Contracts § 193 (1981).
22        DeLuca does not challenge the bankruptcy court's fact
23   finding that he knew of the Second Case filed by Cuomo in 2009.
24   Nor can he.   DeLuca's Client Interview Sheet, signed by Cuomo,
25   indicates that Cuomo informed his staff she had a previous
26   bankruptcy that had been dismissed.     Further, DeLuca does not
27   take issue with the bankruptcy court's finding that he reviewed
28   the Second Case.   Indeed, DeLuca admits he examined the earlier

                                      -24-
 1   filing, but only to determine if Cuomo was eligible to file yet
 2   another bankruptcy petition, and that it was not his practice to
 3   review the schedules of prior bankruptcies.      Hr’g Tr. 4:22-25,
 4   April 2, 2013.
 5        The bankruptcy court determined that DeLuca had the duty to
 6   review the Second Case with Cuomo, and that had he diligently
 7   done so, he would have discovered the existence of the Ritchie
 8   Debt.   As the court noted, even if Cuomo had not given him a
 9   petition and schedules from the earlier bankruptcy, they were
10   readily available through the court’s PACER system of electronic
11   records.   Sanction Opinion at 18.     As the bankruptcy court
12   summarized, “DeLuca’s arguments are to no avail.      The marginal
13   expense of cross-checking prior schedules is far outweighed by
14   the duty to provide competent representation by throughly
15   investigating the facts.”   Sanction Opinion at 20.
16        Likewise, the bankruptcy court could properly disregard
17   DeLuca’s argument that he could not rely on schedules prepared in
18   the earlier bankruptcy cases because the attorneys in those cases
19   had been sanctioned for incompetence.      First, the bankruptcy
20   court observed that DeLuca’s position was inherently
21   contradictory.   DeLuca stated that he never reviewed prior
22   bankruptcy schedules, so it would not matter who prepared them.
23   Secondly, at the time DeLuca filed the Third Case, he was not
24   aware of the misfeasance of Cuomo’s previous attorneys.
25   Sanctions Opinion at 21.
26        We agree with the bankruptcy court that DeLuca violated Nev.
27   R. 1.1 by his failure to competently investigate and take
28   reasonable steps to assure that all of his client’s creditors

                                     -25-
 1   were listed on the Original Schedule F.
 2        The bankruptcy court also determined that DeLuca violated
 3   § 707(b)(4)(C), observing that other courts interpreting that
 4   Code provision have rejected an attorney's attempt to "blame the
 5   client" for mistakes.   For example, in Withrow v. Collins
 6   (In re Withrow), 405 B.R. 505, 523 (1st Cir. BAP 2009), the panel
 7   rejected the attorney's argument that he failed to schedule
 8   closed bank accounts because of the debtor's poor health and
 9   faulty memory.   See also In re Garrard, 2013 Bankr. LEXIS 3140,
10   at * 17-18 (Bankr. N.D. Ala. August 5, 2013) (“The Debtors'
11   attorney would exonerate himself from any responsibility by
12   shifting the blame to his client who, according to the attorney,
13   furnished the inaccurate information in the first place: ‘ANY and
14   ALL information contained in both petitions were [sic] provided
15   by the debtors.’   The Court is skeptical that [the debtor] was
16   the exclusive source of the misinformation, but even if he were,
17   that would not excuse the attorney's failure to inquire
18   further.”).
19        The bankruptcy court also found that Cuomo did everything
20   that DeLuca asked her to do.   She reviewed the draft petition and
21   schedules in good faith and, unfortunately, failed to spot the
22   omitted Ritchie Debt.   But even so, it was DeLuca, not Cuomo, who
23   was charged with the statutory duty under § 707(b)(4)(C)(1) to
24   conduct a reasonable inquiry into Cuomo’s financial affairs.
25   Because DeLuca was aware that Cuomo had filed a prior bankruptcy
26   case and schedules, he should have appreciated the need to review
27   the prior filings and to compare the information therein to that
28   he proposed to submit in Cuomo’s Third Case for consistency and

                                     -26-
 1   completeness.   That he did not do so contributed to the failure
 2   to list the Ritchie Debt in Cuomo’s Third Case and to all of the
 3   consequences flowing from that omission.
 4        B.   The sanction was reasonable.   This Panel consults the
 5   ABA Standards for Imposing Lawyer Sanctions (the “ABA Standards”)
 6   for determining the reasonableness of sanctions.   In re Nguyen,
 7   447 B.R. at 277.    The ABA Standards require consideration of four
 8   factors in determining the propriety of an attorney sanction:
 9   (1) the duties violated, whether owed to a client, the public,
10   the legal system, or the profession; (2) the lawyer's mental
11   state, whether he acted intentionally, knowingly, or negligently;
12   (3) the seriousness of the actual or potential injury caused by
13   the lawyer's misconduct; and (4) the existence of aggravating or
14   mitigating circumstances.   ABA Standards 9; In re Nguyen,
15   447 B.R. at 277.
16        The bankruptcy court addressed each of these four factors.
17        As to Factor 1, the duties violated, the bankruptcy court
18   found that DeLuca harmed the public by practicing in a manner
19   that erodes the public's trust in attorneys; that his conduct
20   harmed the legal profession because his practice of deliberately
21   ignoring his clients' prior bankruptcy schedules reflects poorly
22   on the legal profession and engenders distrust and the perception
23   that attorneys are inattentive to clients' particular
24   circumstances; and that his conduct harmed the legal system by
25   forcing the court to spend its limited resources on this
26   sanctions matter.   Sanction Opinion at 27-28.
27        As to Factor 2, the lawyer's mental state, the bankruptcy
28   court found that DeLuca's conduct was “reckless, or at least

                                      -27-
 1   undertaken with conscious indifference.”     It also found that
 2   DeLuca only reviews prior petitions to determine if a client is
 3   eligible to file for bankruptcy and therefore knows or should
 4   know that he is turning a blind eye to potentially relevant
 5   information in prior schedules.     Sanction Opinion at 28-29.
 6        As to Factor 3, the seriousness of the injury DeLuca caused,
 7   the bankruptcy court observed that Cuomo was now embroiled in an
 8   adversary proceeding that very well could have been avoided;
 9   although the adversary proceeding may have occurred in any event,
10   DeLuca's actions increased the probability that it would occur.
11   Sanction Opinion at 30-31.
12        As to Factor 4, aggravating or mitigating circumstances, the
13   bankruptcy court determined that DeLuca justified his ignoring
14   the information in prior schedules by citing the cost to his
15   practice.    In the court’s words, such a "regularized practice can
16   only be characterized as selfish and a violation of the fiduciary
17   duty to place clients' needs first."     Sanction Opinion at 32.
18   The court found that DeLuca refused to admit his mistakes; he
19   blamed Cuomo for not being sufficiently forthcoming; and,
20   finally, as an experienced consumer bankruptcy practitioner, he
21   should understand that information in prior schedules is always
22   relevant to properly understand a clients' circumstances and may
23   have relevance for the relief available to a client and the risks
24   that a client may face by taking or failing to take certain
25   actions.    Sanction Opinion at 31-32.
26        On this record, having considered the appropriate factors,
27   the bankruptcy court could have imposed more drastic sanctions on
28   DeLuca.    His lack of a reasonable inquiry into Cuomo’s financial

                                       -28-
 1   affairs arguably caused an injury or prejudice not only to his
 2   client, but to the public (which relies upon the accuracy of
 3   bankruptcy filings), and to the legal system (which is burdened
 4   by the additional legal procedures stemming from the omission of
 5   the Ritchie Debt).   ABA Standards 24.    Instead, the bankruptcy
 6   court opted for an extremely modest monetary sanction: requiring
 7   DeLuca to disgorge $851 of his $1,499 fee.     The bankruptcy court
 8   has "wide discretion in determining the amount of a sanctions
 9   award."   In re Kayne, 453 B.R. at 386.    Given the nature and
10   seriousness of DeLuca's transgressions, the bankruptcy court’s
11   sanction of $851 is reasonable.
12                               CONCLUSION
13        Because the disciplinary proceeding was fair, the evidence
14   supports the findings made, and the penalty imposed was
15   reasonable, we conclude that the bankruptcy court did not abuse
16   its discretion in sanctioning DeLuca $851.     We AFFIRM the
17   bankruptcy court's order imposing the disgorgement sanction.
18
19
20
21
22
23
24
25
26
27
28

                                       -29-