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Lawyer Sanctioned for Unauthorized Filing

A lawyer who failed to produce a wet signature on a Chapter 13 bankruptcy petition and misrepresented the purported debtor’s address, completion of the required credit counseling  and her financial circumstances, as well as venue, receives a 60-day suspension from practicing before the Norfolk U.S. Bankruptcy Court and is jointly liable with his firm for a $1,000 payment to the purported debtor.

It is not disputed that neither the lawyer, Peter F. Zooberg, nor the law firm of Philip R. Boardman PC, have been able to produce the wet signature of T.H., the purported debtor, on any document filed in this case. The court agrees with the concession of counsel that the failure to produce the wet signature on a petition leads to the conclusive presumption that the signature does not exist. Disputed in this matter is whether, despite failing to produce T.H.’s wet signature on any document in the bankruptcy case, the lawyer nevertheless obtained T.H.’s authorization to file a bankruptcy petition on her behalf on Aug. 20, 2013, and list of creditors filed Aug. 20, 2013. T.H.’s electronic signature was affixed to the petition to an exhibit of the Individual Debtor’s Statement of Compliance with Credit Counseling Requirement, filed with the petition.

According to T.H., she went to the lawyer’s office to sign paperwork to assist her husband, from whom she was separated but for whom she held a power of attorney during his military deployment, in a short sale of real estate. She adamantly and, the court specifically finds, credibly denied that she signed any documents at any time during her meeting with Zooberg and that she took any documents or papers with her when she left the law firm office. The court considers significant the fact that Zooberg stated on numerous occasions during examination and in pleadings that his recollection of the brief meeting with T.H. and the day’s events in general is “hazy.” No original signed petition has been produced in this case. There is no engagement letter memorializing T.H.’s  intent to have the law firm file a bankruptcy on her behalf. There is no intake form documenting T.H.’s visit to the firm and her purpose for meeting with Zooberg. The only evidence offered for a signed and authorized petition in this case is Zooberg’s purportedly clear recollection of T.H. signing the petition in an otherwise hazy blur of a day. The court finds that Zooberg failed to obtain T.H.’s wet signature on the petition.

The court finds T.H. is a highly credible witness. In contrast, the court finds the credibility of Zooberg’s testimony to be lacking. The court finds T.H. did not authorize the filing of the petition and that Zooberg did not have permission to affix T.H.’s electronic signature to the petition.

Due diligence

The court further finds that, due to the lawyer’s failure to conduct an appropriate inquiry of T.H.’s financial circumstances, he had no knowledge of her assets, liabilities, income or creditors. Despite having no knowledge of her financial circumstances, he made a series of representations on the petition regarding T.H.’s circumstances. The court finds the lawyer made misrepresentations with respect to T.H.’s assets, liabilities and creditors on the Chapter 13 petition. Finally, the court finds that the lawyer made a misrepresentation in the petition regarding venue. He admitted he did not ask T.H. where she had been living and whether she had been living in the Eastern District of Virginia for the 180 days prior to filing the petition.

Even assuming this court was to find that the petition in this case was authorized by T.H., which it resolutely does not, this petition represents the worst example of bad faith filing by a counsel that has presented itself in many years. Had T.H. not unwittingly discovered the bankruptcy filing and personally initiated contract with Zooberg, he likely would not have had any further contact with her. She only received notice of the bankruptcy filing when she was denied a T.J. Maxx credit card a year later.

In response to an internal audit conducted by his counsel, Zooberg provided 100 debtor files, consisting of 50 petitions filed by the law firm prior to Aug. 20, 2013, and 50 petitions filed by the firm after Aug. 20, 2013. Zooberg was able to produce original signed copies of the petitions, original signed copied of the Exhibits Ds filed with the petitions, and signed retention letters in each of the 100 cases. Zooberg estimated he has filed between 300 and 400 cases since the filing of T.H.’s petition and testified the firm has retained the original signed petition, Exhibit D and retention letters in each of these cases. In response to a request from the U.S. Trustee’s office to produce the original signed documents filed with the court for three particular cases, Zooberg was able to do so to the trustee’s satisfaction. The court acknowledges Zooberg’s and the firm’s efforts to amend their office policies since the filing of the sanctions motions and motion to expunge T.H.’s case and their willingness to participate in audits and reviews of their other files. Having no prior pattern of misconduct is unquestionably significant to the court; it does not, however, exculpate the extensive misconduct that has occurred in this one most sad incident.

The court finds Zooberg’s conduct in this case fell far short of his fundamental professional obligations and was unethical. Zooberg allowed the case to lapse and ultimately be dismissed, despite receiving numerous electronic notifications from the court. Likewise, the court finds the practices and procedures of the firm exhibited in this case fell far below any appropriate standard of care required of those granted the privilege to practice before the court.

The court concludes that Zooberg should be suspended from practice before this court for a period of 60 days commencing April 1, 2015. The court concludes the lawyer and the firm should pay a fine of $1,000, for which they are jointly and severally liable, to T.H., representing the disgorgement of the fee paid by a third party for the filing of the petition in this case. The sanction is not punitive but is the appropriate measure to provide Zooberg and the firm an opportunity to ensure that their conduct in all of their future cases before this court is commensurate with the expectations and obligations of practice in this court.

In re: T.H. (St. John) No. 13-73077, March 18, 2015; USBC at Norfolk, Va. VLW 015-4-028, 49 pp.


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