Bankruptcy Filing Reprieve: April Fools!

A Nevada attorney filed 25 bankruptcy cases near the deadline before a change in the law. Unfortunately for him and his clients, they were just after the deadline, not just before. The court dismissed the cases, determined the late filing was the fault of the attorney, and ordered him to disgorge all the compensation he'd received.

Moral: Pay attention to those deadlines!

Almost five years later, the lawyer tries to reopen the case, based on a press release indicating that there had been a computer glitch preventing filing on the deadline and Congress had passed a law to give filers two hours back. He did not cite the statute. In fact, he hadn't been able to confirm anything about the press release. And he didn't notice (or didn't care) that, along with being implausible, the press release was dated April 1. The court denied his motion and sanctioned the lawyer for Bankruptcy Rule 9011 (which is similar to Fed. R. Civ. P. 11).

The court also offered a research lesson:

n. 13   Mr. Huntsman alleged that he was unable to independently verify the accuracy of the Press Release or the existence of the law in question because his office does not subscribe to either Westlaw or Lexis. This alone gives rise to concerns as to the reasonableness of Mr. Huntsman's inquiry into the matter, Gutierrez v. City of Hialeah, 729 F.Supp. 1329, 1332 (S.D.Fla.1990) (attorney's inquiry was not reasonable within the meaning of Civil Rule 11 where the attorney did not consult available "basic legal research tools, such as citators, digests, annotated codes, or computerized searches") (citations omitted); Blake v. Nat'l Casualty Co., 607 F.Supp. 189, 191 n. 4 (C.D.Cal.1984) (where attorney did not shepardize relevant case law, did not consult an annotated code or a digest, and failed to conduct a computer search, the attorney's inquiry was not reasonable for the purposes of Civil Rule 11). There are many free legal research tools available to attorneys such as Mr. Huntsman. Not only could he consult one of the many law libraries in Nevada, but as a member of the State Bar of Nevada, Mr. Huntsman has free access to the Fastcase legal research database. See State Bar Member Benefits: Fastcase, STATE BAR OF NEVADA, http://www.nvbar.org/content/fastcase (last visited Oct. 12, 2011). In addition, the Thomas website, maintained by the Library of Congress, is freely available to the public. It is a particularly thorough and accurate source for research concerning federal legislation. See Thomas, THE LIBRARY OF CONGRESS, http://thomas.loc.gov (last visited Oct. 12, 2011). Finally, the Legal Information Institute, affiliated with the Cornell University Law School, maintains a website which makes available, free of charge, the United States Code, the Code of Federal Regulations, Supreme Court cases dating to 1990, the Uniform Commercial Code and many other legal resources too numerous to fully list here. See Legal Information Institute, CORNELL UNIVERSITY LAW SCHOOL, http://www.law.cornell.edu  (last visited Oct. 12, 2011). The lack of a Westlaw or Lexis subscription, therefore, cannot be said to be an impediment to Mr. Huntsman's ability to confirm whether or not the federal law he claimed to exist did, in fact, exist.

Moral: know how to research!

The case is In re Schivo, 462 B.R. 765 (Bankr. D. Nev. 2011), available on Google Scholar.

Hat tip: West Headnote of the Day