Dennis Darnay Williams v. Marjorie K. Lynch

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 5:13-cv-00696-BO,12-05122-8-SWH Copies to all parties and the district court/agency. [999598530].. [14-1881]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1881

In Re:

ROBERT LEWIS, JR.,
Appellant.

-----------------------------------DENNIS DARNAY WILLIAMS,
Plaintiff,
v.
MARJORIE K. LYNCH,
Defendant – Appellee,
JAMES B. ANGELL,
Party-in-Interest - Appellee.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh.
Terrence W. Boyle,
District Judge. (5:13-cv-00696-BO)

Submitted:

April 28, 2015

Decided:

June 9, 2015

Before KEENAN, WYNN, and DIAZ, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Robert Lewis, Jr., LEWIS LAW FIRM, Raleigh, North Carolina, for
Appellant.
Brian
C.
Behr,
OFFICE
OF
THE
BANKRUPTCY

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ADMINISTRATOR,
Raleigh,
North
Carolina;
James
Nicholas C. Brown, HOWARD, STALLINGS, FROM &
Raleigh, North Carolina, for Appellees.

B.
Angell,
HUTSON, PA,

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Robert Lewis, Jr., appeals from the district court’s order
affirming the order of the bankruptcy court partially suspending
him

from

practicing

in

the

bankruptcy

court,

ordering

the

disgorgement of undisclosed attorney fees received, and imposing
a $2500 monetary sanction.

He also appeals from the district

court’s affirmance of the bankruptcy court’s order reinstating
his

bar

privileges

after

an

additional

compliance with the sanctions order.

term

and

upon

Lewis’

We affirm.

During the investigation of a debtor in bankruptcy, the
Bankruptcy Administrator (“BA”) identified several discrepancies
within

the

debtor’s

bankruptcy

schedules

and

between

the

debtor’s statements and those prepared by his attorney, Robert
Lewis, particularly with respect to fees paid to Lewis.

After

further investigation, the BA filed a report of Lewis’ alleged
misconduct and moved for sanctions to be imposed against Lewis
for

violating

bankruptcy

the

cases.

requirement
The

of

BA

full

also

disclosure

asserted

of

fees

numerous

in

other

violations by Lewis, including the acceptance of more than $6000
from

the

prepetition

debtor,
civil

purportedly
litigation

toward
of

which

attorney’s
the

fees

debtor

for

denied

knowledge; continuing to represent the debtor without approval
from the bankruptcy court after conversion of the debtor’s case
to Chapter 11; violating the rule against “ghost-writing” appeal
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documents for
filed

the

documents

debtor;

that

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and

failing

contain

an

to

maintain

original

copies

signature.

of
The

Chapter 7 Trustee also moved for sanctions on these same bases.
After holding hearings on the BA’s and Trustee’s motions
for sanctions, the bankruptcy court determined that sanctions
were appropriate and temporarily suspended Lewis from initiating
new

bankruptcy

cases

on

behalf

of

clients

in

the

Bankruptcy

Court for the Eastern District of North Carolina until December
14,

2013.

With

respect

to

existing

clients,

Lewis

was

authorized to continue his representation, but was required to
submit monthly reports to the court and to the BA, certifying
that

he

was

the

attorney

of

record

and

disclosing

all

compensation paid or to be paid to him for his services in
connection with his pending bankruptcy cases.

The court ordered

Lewis to pay $2500 in sanctions and to disgorge $8400 in fees.
The

court

additionally

ruled

that

Lewis’

reinstatement

to

practice was conditioned on his full compliance with the court’s
order.

The court warned Lewis that failure to fully comply will

result in more severe sanctions.
During the hearing on Lewis’ reinstatement, the bankruptcy
court found that Lewis had not fully complied with the sanctions
order.

The court directed that Lewis’ privilege to practice

before the bankruptcy court would be reinstated on May 19, 2014,
provided that, before that date, Lewis paid the sanctions and
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disgorged the fee amount, as required by the court’s original
sanctions order.
reporting

The court also ordered that the heightened

requirements

sanctions

order

would

imposed

on

continue

Lewis

for

all

in

new

the

original

bankruptcy

cases

filed by Lewis.
Lewis

appealed

reinstatement order.
court’s

rulings.

challenging

the

from

the

sanctions

order

and

from

the

The district court affirmed the bankruptcy
Lewis

authority

noted
of

the

his

appeal

to

bankruptcy

this

court

court,

to

order

sanctions, the nature of the sanctions imposed, and the fact
that the bankruptcy court did not issue findings of fact or
conclusions of law.

He also argued that the district court

erred by considering the Appellees’ brief filed in the appeal
from

the

appeal

reinstatement

from

the

order

sanctions

in

order

deciding
and

the

erred

by

issues

in

the

affirming

the

bankruptcy court’s disposition without holding oral argument.
Lewis contends that the bankruptcy court lacks authority to
suspend the bar privileges of attorneys who practice in that
court, claiming that only the district court has such authority.
We do not agree.
The bankruptcy court has the inherent power, “incidental to
all

courts”

to

“discipline

attorneys

who

appear

Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991).

before

it.”

This inherent

power includes the power to suspend or disbar attorneys from
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practicing before the court.

In re Snyder, 472 U.S. 634, 643

(1985).

Bankruptcy

Additionally,

the

Code

authorizes

the

bankruptcy court to “issue any order, process, or judgment that
is

necessary

[Title

11]

or

or

appropriate

to

prevent

to

an

carry

abuse

out

of

the

provisions

process.”

11

of

U.S.C.

§ 105(a) (2012); see In re Walters, 868 F.2d 665, 669 (4th Cir.
1989) (upholding under 11 U.S.C. § 105(a), contempt sanctions
based

on

attorney’s

failure

to

disclose

fees,

disgorge

unauthorized fees, and obtain authority to represent debtor).
We conclude that the bankruptcy court appropriately determined
that it had the authority to sanction Lewis for his misconduct.
See In re Johnson, 921 F.2d 85, 586 (5th Cir. 1991) (stating
that bankruptcy courts “have both the statutory and inherent
authority

to

deny

attorneys

and

others

the

privilege

of

practicing before that bar”).
Lewis contends that, pursuant to Stern v. Marshall, 131
S. Ct.

2594

(2011),

bankruptcy

attorney disciplinary matters.

courts

lack

authority

over

In Stern, the Court held that

Congress exceeded the limitation of Article III by identifying
as

a

“core

bankruptcy

matter”
against

a
a

state-law
creditor

counterclaim

who

had

jurisdiction of the bankruptcy court.
counterclaim
bankruptcy

was
law,”

“in
the

no

way

6

a

Court

from

debtor

consented

Id. at 2620.

derived

Supreme

not

by

or

to

the

Because the

dependent

determined

in

that

upon
the

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bankruptcy court could not, in compliance with the Constitution,
enter a final order on that claim.

Id. at 2618.

We think Lewis’ situation is distinguishable.

The basis

upon which the bankruptcy court imposed sanctions was Lewis’
violation of bankruptcy law and procedures and his misconduct in
the

bankruptcy

jurisdiction
voluntarily
attorney

court.

over

this

presented

and

The

bankruptcy

matter

based

himself
of

officer

in

court,

the

on

the

court
the

clearly

fact

bankruptcy
and

that
court

because,

had
Lewis

as

unlike

an
the

counterclaim in Stern, the bases upon which the sanctions were
imposed

arose

proceeding.

from,

and

were

dependent

upon,

the

bankruptcy

Lewis next argues that the sanctions imposed were

in the nature of punishment and therefore amounted to criminal
contempt

and

were

imposed

in

violation

of

his

due

process

rights.

We disagree.

A contempt sanction is criminal if “it is

imposed

retrospectively for a ‘completed act of disobedience’.”

Int’l Union, United Mine Workers of Am. v. Bagwell, 512 U.S.
821, 829 (1994).
purpose

is

to

Contempt sanctions are civil in nature if the
coerce

compliance

with

a

court

compensate another party for losses sustained.

order

Id.

or

to

Suspension

of an attorney from the practice of law is generally deemed a
civil penalty, imposed to coerce compliance with the rules of
the court.

See Ex parte Wall, 107 U.S. 265, 288 (1883); In re

Liotti, 667 F.3d 419, 430-31 (4th Cir. 2011).
7

We conclude that

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sanctions

imposed

on

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Lewis

were

within

the

bankruptcy

court’s authority and that the court appropriately imposed civil
sanctions

partially

bankruptcy
fees,

court,

imposing

suspending

requiring

a

monetary

him

the

from

practicing

disgorgement

sanction,

and

of

in

unauthorized

conditioning

reinstatement upon fulfilling the sanction order.

the

his

See Bagwell,

512 U.S. at 829.
We

also

do

not

think

the

district

consideration of Lewis’ appeal.

court

erred

in

its

First, Lewis’ contention that

the district court erred on appeal by not hearing oral argument
is belied by the record, which evidences that the court held a
hearing and Lewis presented argument.
of

discretion

in

the

district

Second, we find no abuse

court’s

consideration

of

the

Appellees’ brief in the reinstatement appeal to resolve issues
in the sanctions appeal.
1208

n.*

(10th

noncompliant
opposing

briefs

party

is

Cir.
at
not

See In re Haberman, 516 F.3d 1207,
2008)
court’s

(allowing

consideration

discretion,

prejudiced);

Price

v.

provided
Digital

of
that

Equip.

Corp., 846 F.2d 1026, 1028 (5th Cir. 1988) (same).
Lastly, Lewis contends that the district court erred by
upholding

the

bankruptcy

court’s

ruling

where

the

bankruptcy

court did not expressly state findings of fact and conclusions
of law.

Because Lewis failed to raise this argument in the

district court, it is waived on appeal.
8

See In re Wallace &

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Gale Co., 385 F.3d 820, 835 (4th Cir. 2004) (on appeal from
bankruptcy

court’s

ruling,

failure

to

raise

argument

before

district court results in waiver of argument on appeal “absent
exceptional circumstances”).
In

sum,

we

find

no

reversible

bankruptcy court or the district court.
the

district

court’s

order.

We

error

by

either

the

Accordingly, we affirm

dispense

with

oral

argument

because the facts and legal contentions are adequately presented
in the materials before this court and argument would not aid
the decisional process.
AFFIRMED

9