Order Modifying Restriction of Attorney Peter M. Hartnett's Right to Practice Before this Court Subject to Further Court Order Upon Attorney Application on or After November 7, 2019 Demonstrating Compliance with Stated Conditions

MARGARET CANGILOS-RUIZ, Bankruptcy Judge.

Before the court is Attorney Peter M. Hartnett's motion, supported by affirmation, seeking to (i) vacate this court's prior order of April 8, 2019 (Doc. 62) ("April 8 Order") and (ii) allow him to withdraw as counsel of record for Debtor in this case. (Docs. 69, 70) ("Motion"). As addressed below, the court (a) declines to vacate its April 8 Order but modifies its provision restricting Attorney Peter M. Hartnett's right to practice before this court and (b) grants permission for Attorney Hartnett to withdraw as Debtor's counsel of record.

Summary Findings and Conclusions

Attorney Hartnett violated New York Rules of Professional Conduct 1.1(a) and (b)1 as evidenced by the manner in which he conducted this case. Counsel did not exhibit the requisite knowledge and skill required to render competent representation. He proceeded with the representation as a sole practitioner knowing that "I admittedly have very little experience in bankruptcy." Affirmation of Peter M. Hartnett dated April 25, 2019 at ¶4 (Doc. 70) ("Affirmation"). Once in the case, Attorney Hartnett did not appropriately withdraw from the representation in violation of Rule 1.16(d). This left the court and other parties to rightfully assume that the Debtor was represented while Attorney Hartnett remained counsel of record. The Debtor, however, was left to fend for himself. By failing to respond to the trustee's motion to dismiss Debtor's case, or to appear at a confirmation hearing on his client's proposed plan, counsel failed to pursue the objectives of his client. Counsel (i) failed to inform the court of his change of address, (ii) failed to respond to a court order directing his appearance before the court, (iii) admits to not reading the notices sent to him through this court's electronic case filing system nor the courtesy copy mailed to him at his law firm address. Counsel further requested and received additional fees from his client after the case was filed without court authorization, which he failed to disclose.2

Due to the foregoing findings, Attorney Hartnett is restricted from practice before the United States Bankruptcy Court for the Northern District of New York for a period of six (6) months or until November 7, 2019. After November 6, 2019, Attorney Hartnett may file an application before the then Chief Bankruptcy Judge for the Northern District of New York to lift the restriction. The restriction may be reconsidered at that time if counsel can: (1) certify in an affidavit that he has read, comprehends and will abide by the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules for the Northern District of New York ("Local Bankruptcy Rules" or LBR ____") and (2) can establish that since the return date of the Motion he has completed: (i) at least sixteen (16) credit hours of continuing legal education training in consumer bankruptcy law, at least six (6) hours of which involve in-person, live instruction,3 and (ii) an additional on-site training course offered by the Clerk's office in this court's CM/ECF docketing system.4 As to the requested further relief to withdraw from the case, Peter Hartnett is relieved of his role as Debtor's counsel and Clinton Gamlen shall proceed pro se until substitute counsel files a notice of appearance. The Clerk is directed to amend the docket accordingly.

Background and Discussion

On July 2, 2018, Attorney Hartnett caused to be filed a chapter 13 voluntary petition on behalf of Clinton Gamlen. The Clerk's Office issued a notice of deficiency and set July 16 as the deadline for the filing of missing documents. On July 24, 2018, when all the required documents had not been filed, this court issued an order providing notice that unless the documents were filed by July 27, the case would be dismissed. The documents were filed by the extended deadline but the Clerk issued a further deficiency notice as to Debtor's chapter 13 plan. Thereafter, according to the default procedures of this court, the chapter 13 trustee noticed a motion to dismiss the case. (Doc. 54). No written answer was filed by counsel in response to the motion as required by Local Bankruptcy Rule 9013-3(b). Therefore, pursuant to this court's default procedures, the case was subject to dismissal without a hearing. Id. Nevertheless, on the return date, the Debtor appeared in court by himself and offered sworn testimony regarding his inability to reach his counsel who had, apparently, moved his office without notifying the Debtor. This court set a further hearing for April 8, 2019 and ordered Attorney Hartnett to appear. The court further directed that if counsel did not wish to proceed with the representation, he was to file a motion by April 3, made returnable before the court (Doc. 58) ("March 26 Order"). The March 26 Order provided notice to Attorney Hartnett that the court would consider at the upcoming hearing any evidence that counsel wished to present to address his client's assertions regarding the representation. Notice was given that if he failed to appear and abide by the court order that he would be subject to sanctions, including suspension from practice before the court.

Attorney Harnett did not file a motion to withdraw as counsel by April 3 and failed to appear at the April 8 hearing. Attorney Hartnett's failure to comply with the March 26 Order resulted in the court entering its April 8 Order which suspended Attorney Hartnett from practice before the court subject to further court order.

On April 26, 2019, Attorney Hartnett filed the instant Motion. In the accompanying Affirmation, Attorney Hartnett cites his inexperience, workload, change of office locations and health concerns as reasons for his behavior. Attorney Hartnett admits that he had agreed to represent Debtor in this matter despite little experience in bankruptcy. Affirmation at ¶4. He alleges that he was "effectively terminated" by Debtor on March 19, 2019. Id. at ¶5. He admits that he refused to respond to Debtor's voicemails and text messages, which Attorney Hartnett described as, "hateful vitriol, threats, obscenity and slanderous lies." Id. Attorney Hartnett states that he "assumed" that Debtor had retained substitute counsel, and that he thought he no longer needed to appear on Debtor's behalf. Id. at ¶7. He proffers the explanation that he was in the process of changing office locations, and that he simply forgot to update his address with the court. Id. at ¶8-9. He admits that he did not read the court's notices and orders, which were mailed to him as a courtesy, because they were misplaced. Id. He admits that he neglected to open the notices sent to his email address via the court's CM/ECF electronic system. Id. at ¶11. He states that he first learned of the pending orders when he received a notice from the New York State Attorney Grievance Committee. Id. He characterizes his ignorance of the court's orders as "grossly negligent" but "not intentional." Id. at ¶12. He agrees that his conduct was sanctionable, but that "suspension is excessive under the circumstances." Id. at ¶15.

On May 7, 2019, the court held a hearing on the Motion at which both Attorney Hartnett and Debtor appeared. Debtor provided additional sworn testimony. Debtor testified that he did not terminate Attorney Hartnett's employment and that his communications constituted continued requests for Attorney Hartnett to appear in court and file documents on his behalf. He testified that Attorney Hartnett filed the original bankruptcy petition without Debtor's prior review and signature before filing, and that Attorney Harnett affixed Debtor's electronic signature to the petition without his consent. Apart from reiterating some of the statements in his Affirmation, Attorney Hartnett did not offer any evidence to contradict the additional facts to which the Debtor testified which the court accepts as true. These facts demonstrate that Attorney Hartnett violated the CM/ECF protocols of this court, Fed. R. Bankr. P. 1008 and LBR 1002-1(a) (stating, "[t]he petition must be signed and dated by the debtor contemporaneously with the filing . . . An electronic signature is considered an original signature upon the filed documents for all purposes under the Bankruptcy Code, relevant federal and state statutes, and applicable federal rules.").

Debtor further testified that after paying Attorney Hartnett the initial amount of $1,000.00, which was disclosed in counsel's Form 2016 Disclosure of Compensation form (Doc. 17), Debtor paid Attorney Hartnett an additional $500.00. This additional amount was never disclosed as required by Fed. R. Bankr. P. 2016 nor did counsel seek approval of the fees from the court "based upon prior application after notice and a hearing" as specified in LBR 2016-2(d).5

Attorney Hartnett did not question Debtor at the hearing. He did not provide reasons why his behavior was excusable or why he should be able to practice before this court. The only excuse Attorney Hartnett attempted to provide was a general averment of "law office failure." Affirmation at ¶12. Under the circumstances, the court discounts law office failure as a legitimate reason given to excuse counsel's failure to perform the duties owed to his client and to this court as an officer of the court.6 Counsel has stated that he does not intend to practice bankruptcy in the future. If this is truly the case, then Attorney Hartnett's restriction from practice in bankruptcy court should not be an issue. Otherwise, the court offers a roadmap for counsel to rejoin the bankruptcy bar once he has established his competence to do so. The court underscores that this order does not affect Attorney Hartnett's general admission to practice before the United States District Court for the Northern District of New York but is limited by its terms to only the bankruptcy court.

Federal courts have the inherent authority to suspend attorneys. Chambers v. NASCO, Inc., 501 U.S. 32, 40 n.5 (1991) (discussing the authority of a federal court "to supervise those admitted to practice before it.") Under the Bankruptcy Code, the court has the inherent authority under 11 U.S.C. § 105(a) to suspend an attorney from practice. In re Lewis, 611 Fed. Appx. 134, 137 (4th Cir. 2015) ("This inherent authority and power includes the power to suspend or disbar attorneys from practicing before the court."); see also In re Nguyen, 447 B.R. 268, 281-82 (9th Cir. B.A.P. 2011).

Rule 1.1(a) provides that "[a] lawyer should provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation." Rule 1.1(b) provides that, "A lawyer shall not handle a legal matter that the lawyer knows or should know that the lawyer is not competent to handle, without associating with a lawyer who is competent to handle it."

Attorney Hartnett failed to demonstrate that he had the required knowledge and skill set to appropriately navigate the bankruptcy system in his representation of the Debtor, in violation of Rule 1.1(a). It is apparent from the deficiencies in this case and his own admissions that Attorney Hartnett does not know the relevant law and rules required to practice bankruptcy. Almost all of Attorney Hartnett's filings were followed by a Notice of Deficiency from the clerk's office.7 In addition to his failure to appear at the confirmation hearing, Attorney Hartnett failed to respond to the chapter 13 trustee's default motion to dismiss. This motion, which had the potential to dispose of the entire case and severely prejudice Debtor, would have been granted on default if not for Debtor's appearance in court. LBR 2016-3 clearly sets forth the required services to be rendered by a chapter 13 debtor's counsel. Specifically included are to "attend the original and any adjourned confirmation hearing" and "represent the debtor in connection with motions for dismissal." LBR 2016-3(b)(3) (A) and (H). Attorney Hartnett's failure to perform these basic services, respond to his client, open his emails and respond to the court's hearing notices demonstrate his lack of competence in bankruptcy.

Attorney Hartnett also failed to appropriately withdraw as counsel to Debtor in violation of Rule 1.16(d). This failure further demonstrates his lack of knowledge, understanding and familiarity with the relevant rules that govern the practice.8 Counsel claims that he was terminated and that when he understood he was terminated, he "assumed that Mr. Gamlen had made arrangements to retain other counsel . . ." (Doc. 70 ¶7). Such assumption was misplaced, inappropriate and further demonstrative of incompetence.

The foregoing violations of Rules 1.1(a) and (b) and 1.16(d) underscore that Attorney Hartnett is not versed in the myriad of rules-including the Federal Rules of Bankruptcy Procedure and Local Bankruptcy Rules-that govern practice in the bankruptcy court. Without a thorough knowledge of these working rules, it becomes impossible to competently practice in the bankruptcy arena.

Accordingly, the terms of the court's April 8 Order are modified as noted above.

SO ORDERED.