Robert E. Grant
Not Intended for Publication
DECISION AND ORDER ON ORDER TO SHOW CAUSE
At Fort Wayne, Indiana, on February 7, 2014.
On January 14, 2014, the court held a hearing with regard to confirmation of the debtor's proposed chapter 13 plan. The trustee, Debra Miller, and her counsel, Jon Rogers, appeared for the hearing. Debtor's counsel, Daniel Matern, was nowhere to be seen. As a result, the court denied confirmation, and, on its own motion, issued an order requiring Mr. Matern to show cause, in writing, why he should not be sanctioned and/or required to pay the reasonable attorney fees and expenses incurred by the trustee in connection with the scheduled hearing. Although Mr. Matern's response to the order to show cause was stricken because it was not signed, the court has nonetheless considered its contents.
A court's most fundamental expectations of the attorneys who appear before it are to show up and be prepared. Thus, an attorney who fails to appear for proceedings scheduled because of something they have filed, or who appears but is substantially unprepared to participate in those proceedings, may be sanctioned either through the court's inherent authority or through Rule 16(f) of the Federal Rules of Civil Procedure. See, G. Heileman Brewing Co., Inc. v. Joseph Oat Corp., 871 F.2d 648, 651-53 (7th Cir. 1989); Matter of Sanction of Baker, 744 F.2d 1438 (10th Cir. 1984); Matter of Philbert, 340 B.R. 886 (Bankr. N.D. Ind 2006). In bankruptcy cases this is true for both adversary proceedings and contested matters. Philbert, 340 B.R. at 889. See also, N.D. Ind. L.B.R. B-9014-2(b).
The failure to appear is specifically identified by Rule 16(f) as a basis for sanctions. At least to the extent the opposing party should be compensated for the reasonable expenses - "including attorney's fees" - incurred because of counsel's non-compliance, the rule is almost, but not quite, mandatory. Unless non-compliance was "substantially justified" or other circumstances would make an award "unjust," the non-defaulting party is entitled to reimbursement. As a result, the imposition of sanctions under the rule does not depend upon a finding of bad faith, willfulness, or contumaciousness. Matter of Sanction of Baker, 744 F.2d 1438, 1440-41 (10th Cir. 1984). A negligent failure to comply will suffice. Id. at 1441. See also, Harrell v. U.S., 117 F.R.D. 86, 88 (D. E.D. N.C. 1987); Barsoumian v. Szozda, 108 F.R.D. 426 (D. S.D. N.Y. 1985).
Counsel's response does not show that his failure to appear for the scheduled hearing was substantially justified or demonstrate that other circumstances would make an award unjust. That response indicates the debtor was not opposing the trustee's motion to dismiss, so counsel believed his attendance was not required. Yet, the hearing held on the 14th was not addressing the trustee's motion to dismiss (that hearing was scheduled for January 28), but was instead scheduled to consider confirmation of the debtor's proposed chapter 13 plan. Had counsel reviewed the docket more carefully, see, Fox v. American Airlines, Inc., 389 F.3d 1291, 1294 (D.C. Cir. 2004); United States, ex rel. McAllan v. City of New York, 248 F.3d 48, 53 (2nd. Cir. 2001); Williams v. Hatcher, 890 F.2d 993, 995 (7th Cir. 1989); DeRango v. United States, 864 F.2d 520, 523 (7th Cir. 1988); In re DeLaughter, 295 B.R. 317, 320 (Bankr. N.D. Ind. 2003), he would have realized different matters in this case had been scheduled for different dates.
To the extent, counsel says he has not been compensated for this case, that does not reduce his responsibilities to his clients or to the court.
If the debtor did not want to continue to pursue his chapter 13 case, the court wonders why the debtor did not ask to dismiss it. See, 11 U.S.C. § 1307(b).
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The court acknowledges that Mr. Matern's absence was not willful or contumacious. It was, instead, simply negligent. That may make counsel's absence understandable, but it does not make it "substantially justified." Neither does it change the reality that the trustee was required to (and did) go to the trouble of properly preparing for and attending the scheduled hearing. Because of Mr. Matern's absence, those efforts were wasted and the court sees nothing unjust about requiring an attorney who has unnecessarily caused its opposition to devote time and trouble to a matter to reimburse them for the reasonable value of their labors. In the court's opinion such a result is necessary, not only as a matter of economic and procedural fairness, but also in order to impress upon litigants the importance of appearing for and being prepared for proceedings scheduled with regard to the things they file.
Mr. Matern shall, therefore, pay the reasonable attorney fees and expenses incurred by the trustee as a result of preparing for and attending the hearing held in this matter on January 14, 2014. Furthermore, in order to compensate the United States for the costs he has unnecessarily imposed upon it and the additional time and attention he has required the court to devote to this matter, thereby depriving other litigants of its attention, and to deter similar conduct, see, BondPro Corp. v. Siemens Power Generation, Inc., 466 F.3d 562, 563 (7th Cir. 2006) ("The time has come to impose an exemplary public sanction in the hope of deterring further violations."), he shall also pay the clerk of this court the sum of $150.00.
The amounts due the clerk of this court shall be paid within fourteen (14) days. The trustee shall have fourteen (14) days from this date within which time to file and serve affidavits itemizing any recoverable fees and expenses. Mr. Matern shall have ten (10) days thereafter in which to file any objections thereto. In the absence of objection, the court will determine the reasonable amount of any fees and expenses without further notice or hearing.
SO ORDERED.
Robert E. Grant
Chief Judge, United States Bankruptcy Court