Jonak v. McDermott

Filing 26

MEMORANDUM, OPINION & ORDER denying appellant's appeal from Bankruptcy Court [Doc. No. 1] and affirming the Bankruptcy Court's March 29, 2013 Order and March 29, 2013 Judgment (Written Opinion). Signed by Judge Susan Richard Nelson on 05/28/14. (SMD)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil Case No. 13-1011 (SRN)
Edward Jonak, d/b/a Affordable Law
Center, Christian Discount Attorney
Services, American Lawworx,
Affordable Court Services, and
Action Plan RX,

MEMORANDUM
OPINION & ORDER

Appellants,
v.
Daniel M. McDermott, Trustee,
Appellee.

Eric A. Rice, Law Office of Eric A. Rice, LLC, 155 South Wabasha Street, Suite 100, St.
Paul, Minnesota 55107, for Appellants
Sarah J. Wencil, Department of Justice, Office of United States Trustee, 1015 United
States Courthouse, 300 South Fourth Street, Minneapolis, Minnesota 55415, for Appellee

SUSAN RICHARD NELSON, United States District Judge
Appellants Edward Jonak, Affordable Law Center (“ALC”), Christian Discount
Attorney Services, American Lawworx, Affordable Court Services, and Action Plan RX
(collectively, “Mr. Jonak”) appeal from a March 29, 2013 ruling of the United States
Bankruptcy Court for the District of Minnesota (“Bankruptcy Court”) in the matter of
McDermott v. Jonak (In re Shadley), 10-BKY-050795, 10-ADV-5031. (Notice of Appeal
[Doc. No. 1].) The underlying Bankruptcy Court Order (the “Order” [Doc. No. 13 at 25])
granted Appellee’s/Plaintiff’s summary judgment motion. Judgment was likewise

entered on March 29, 2013.1 (Judgment [Doc. No. 13 at 79].) For the reasons set forth
herein, Mr. Jonak’s appeal is denied.
I.

BACKGROUND
This case arises from an adversary bankruptcy proceeding filed by Appellee, the

United States Trustee (“Trustee”). The Trustee is an official of the United States
Department of Justice appointed by the Attorney General to supervise the administration
of bankruptcy cases. 28 U.S.C. §§ 581-89. Pursuant to 11 U.S.C. § 307, the Trustee has
standing to appear and be heard on any issue in a bankruptcy case. Thompson v.
Greenwood, 507 F.3d 416, 420 n.3 (6th Cir. 2007). In the bankruptcy action, the Trustee
alleged that Mr. Jonak and his business entities functioned as bankruptcy petition
preparers and debt relief agencies and engaged in the unauthorized practice of law, in
violation of 11 U.S.C. §§ 110 and 526. (APP1-20, Compl.)
A.

Factual Background

Mr. Jonak, who is not an attorney, is the sole shareholder, president and operating
principal of 3rd Millennium Systems, Inc., doing business as ALC.2 (APP21, Stip. of
Facts ¶¶ 2-3, 5 [Doc. No. 55].) ALC is not a law firm nor does it employ counsel
admitted to practice in the United States District Court for the District of Minnesota. (Id.

1

The Order is found in this Court’s docket as an attachment to Appellants’ Brief
[Doc. No. 13 at 25]. In the instant opinion, all page citations to the Order refer to the
Order’s internal page numbers.
In the underlying action, 3rd Millennium Systems, Inc. was a party, but it is not a
party in this proceeding. As the Bankruptcy Court noted in its Order, at various times, 3rd
Millennium used the ALC trade name. (Order at 2.) Accordingly, any references to 3rd
Millennium in the underlying Order apply equally to ALC here, unless otherwise noted.
2

2

¶ 5.) Jonak maintains or has maintained offices in Hibbing, Blaine, Brainerd, and
Bloomington, Minnesota. (Id. ¶ 4.) He was previously enjoined from acting as a
bankruptcy petition preparer in the United States Bankruptcy Court for the District of
Colorado. (Id. ¶ 26.)
Among the services that ALC provided customers were legal services plans for
various subject matters, including bankruptcy. (Id. ¶ 7; APP43, Jonak Dep. at 6.) As set
forth in the parties’ Stipulation of Facts, advertisements for ALC’s services used the word
“law.” (APP23, Stip. of Facts ¶ 8.) Mr. Jonak utilized the following forms of
advertising:
•

A website at www.affordablelawcenter.com, wherein its mission is
declared to be: “provide low cost legal aid to those seeking to avoid
potentially costly and unnecessary legal fees.” Services include
“Bankruptcy Programs” and “program attorneys”. The Defendant
offers “a range of services from bankruptcy and credit repair to debt
settlement programs at a reasonable cost to those seeking help.” The
Defendant offered debtors the opportunity to achieve “a low cost
bankruptcy discharge” and avoid “contend[ing] with overly
expensive bankruptcy fees charged by many attorneys and lawyers.”

•

Signs located in Princeton, Zimmerman, Blaine, and Goodland,
Minnesota.

•

Building signs outside of Brainerd, Blaine, and Hibbing, Minnesota
locations.

•

Phone book listings under “Attorneys, Bankruptcy.”

•

Craigslist [postings] under “legal services.”

•

Newspaper advertisements, with representations such as “Affordable
Law Center! Bankruptcy just $680! Divorce/Custody $530!”
Civil/Criminal etc.” Newspaper ads have appeared [in] such
publications as Manny’s Shopper, Northland Press, Anoka Shopper
and possibly others.
3

(Id.)
The following bankruptcy debtors (“Debtors”) are persons who paid a fee to Mr.
Jonak and are named in the underlying adversary complaint:
Name

Case No.

Filing Date

Fee Paid

Net Income

Kersting, Gayle

10-50379

3/23/10

363

1314.43

Carter, Cheryl

10-50983

7/16/10

363

1484.47

Wilson, Larry &
Karmen

10-50972

7/15/10

580

2271.83

Pankiewicz, Alan

10-51033

7/27/10

680

4000.38

Mattfield, Robert

10-51042

7/28/10

511

2789.00

Boutin, Lorna

10-51032

7/27/10

580

1365.62

Rytty, Arne &
Linda

10-50838

6/16/10

580

3069

Gjestvang,
Michael

10-51084

8/5/10

511

3856.84

Francisco, Kim &
Kristi

10-51095

8/6/10

680

5383.74

Shadley, Jamie

10-50795

7/28/10

511

3597.34

Bushman, Albert

10-50794

6/8/10

363

4888.23

Cavanaugh,
Kevin

10-50837

8/16/10

511

1526.00

Charnley,
Michaele &
Stephen

10-51104

8/9/10

580

1656.22

Cohen, Telaine

10-51118

8/11/10

463

1700

Perry, Michelle &
Clark

10-35329

7/21/10

511

2081.70

Sinn, Jessica

10-45429

7/29/10

580

1974.44

Smith, Jennifer

10-45585

7/29/10

511

1746.27

Freeman, Thomas
& Stella

10-45120

7/8/10

511

3104.00

4

(Id. ¶ 9.) Most of the Debtors testified that they first approached Mr. Jonak after seeing
an advertisement for affordable bankruptcy services. (Id. ¶ 10.) After customers
contacted Mr. Jonak, he advised them that ALC offered “different programs to assist with
any legal issue.” (Id. ¶ 11.) Approximately two-thirds of ALC’s clients met with Mr.
Jonak in person, while the rest communicated with ALC via the mail or internet. (Id.)
Each of the Debtors filed for Chapter 7 bankruptcy, with the exception of Mr.
Pankiewicz, who filed a Chapter 13 petition. (Id. ¶ 14.) All of the Chapter 7 Debtors
received bankruptcy discharges. (Id. ¶ 25.) With the exception of Debtor Alan
Pankiewicz, all of the Debtors proceeded pro se. (Id. ¶ 15.) Mr. Pankiewicz’s legal
counsel was not associated with Mr. Jonak. (Id.)
When providing services to ALC’s clients, Mr. Jonak first explained the ALC
program. (Id. ¶ 12.) ALC offered a one-year bankruptcy legal services program to
provide the procedures necessary for prospective debtors to proceed with bankruptcy.
(Id.) For example, Mr. Jonak asked clients to gather all of their relevant information,
provided pre-bankruptcy counseling, and informed the Debtors that while Jonak was the
program administrator, he contracted with attorneys who could provide legal counsel and
representation to Jonak’s clients. (Id.)
Mr. Jonak required clients, including the Debtors here, to read a document
detailing the benefits offered under the plan (the “Program Benefit” form”), sign an
acknowledgment (the “Acknowledgment” form), and pay Jonak’s fee up-front. (Id.)
The Program Benefits document touted ALC’s services:
Person/Business Legal Consultations! Just pick up the telephone and we
5

will provide you an independent attorney for your free consultation. Peace
of mind for your decisions! Once you have your options, choosing how to
proceed is much easier. You may proceed Pro Se or retain the program
attorney at discounted rates.
(APP123 [Jonak Dep., Ex. 7].)
The individual contracts between the Debtors and ALC indicated that ALC would
provide the following services: (1) debt review/negotiation or debt negotiation guidance;
(2) bankruptcy filing (as needed or requested); (3) post-bankruptcy credit guidance; (4)
social security/disability assistance; and (5) one-year legal plan benefits. (APP27, Stip. of
Facts ¶ 17.) Debt negotiation or settlement assistance involved referral to an attorney
because ALC and Mr. Jonak were not licensed as a debt settlement service with the
Minnesota Department of Commerce. (Id. ¶ 18.)

Mr. Jonak performed post-bankruptcy

guidance, which involved guiding the Debtors “at no charge to follow through on certain
things that they could do to improve their credit report.” (Id. ¶ 19.) Mr. Jonak admits
that he is not accredited as a credit counseling provider by the Counsel on Accreditation,
the Bureau Veritas Certification North American or BSI Management Systems American,
Inc. (Id.) Nor is Mr. Jonak or his entities registered as a credit services organization in
Minnesota. (Id.)
Mr. Jonak asked Debtors to complete a questionnaire (the “Questionnaire”)
prepared by a bankruptcy petition processing center that operated independently from
ALC and Mr. Jonak. (Id. ¶12.) The Questionnaire was designed to assist the processing
center in typing the bankruptcy petition and related schedules. (Id.)

The Questionnaire

was very similar to official bankruptcy forms. Cf. APP77 (Jonak Dep., Ex. 6) with Fed.
6

R. Bankr. P. Official Form 6B, Personal Property. Mr. Jonak apparently provided the
Questionnaire in some cases, although sometimes the processing center provided it to
Debtors directly. (APP25, Stip. of Facts ¶ 12.) For all but one Debtor, the processing
center that Jonak used was called Justin Jurist/Aleutian Enterprises, located in Winter
Harbor, Maine.3 (Id. ¶ 16.)
The Acknowledgment form provided by Mr. Jonak indicated that “Affordable
Court Services is a membership group allowing access to resources for all legal, tax,
financial issues.” (APP125, Jonak Dep., Ex. 7.) Mr. Jonak required the Debtors to sign a
disclaimer that they had not received legal advice. (Id.) He further required the Debtors
to sign a disclaimer stating that “I do not believe the adverti[s]ing I responded to was
misleading in [any way].” (APP126, Jonak Dep., Ex. 7.)
Debtors also received a list of federal and Minnesota tax exemptions, either from
Mr. Jonak or the processing center. (APP25, Stip. of Facts ¶ 12; APP131-34.) On the
cover page of this document, which stated, “Attention: All Affordable Law Center
Members,” Debtors were asked to select one of the exemptions. (APP131.)
After the Debtors completed the Questionnaire, Mr. Jonak sent it to the processing
center. (APP25, Stip. of Facts ¶ 12.) Using the information provided on the
Questionnaire, the processing center physically typed the bankruptcy documents,
charging the Debtors a separate fee. (Id.) The Justin Jurist processing center charged the
Debtors $69 for processing services, with the exception of Mr. Pankiewicz, who was

3

The exception was Debtor Gayle Kersting, whose documents were typed by
Alana Strother of Atlanta Paralegal, LLC in Lawrenceville, Georgia. (Id. ¶ 16, n.3.)
7

charged $159 because of his Chapter 13 filing. (Id. ¶ 16.) After the processing center
typed the bankruptcy documents, Mr. Jonak then referred the Debtors to a credit
counseling organization and instructed them on how to obtain a free credit report. (Id. ¶
12.) Thereafter, if Debtors contacted Mr. Jonak with issues related to bankruptcy, he
would direct them to a resource center or program attorney.4 (Id.) However, as noted,
Mr. Jonak also provided post-bankruptcy guidance by instructing Debtors on how to
improve their credit reports. (Id. ¶ 19.) Mr. Jonak testified that clients participating in the
bankruptcy plan would receive full access to law firms, referrals to tax accountants, and
other discounts. (Id. ¶ 12.)
Official Bankruptcy Form 7, provided by the Administrative Office of the United
States Courts, is known as the “Statement of Financial Affairs.” On this form, debtors
are required to disclose payments related to debt counseling or bankruptcy:
List all payments made . . . on behalf of the debtor to any persons, including
attorneys, for consultation concerning debt consolidation, relief under the
bankruptcy law or preparation of a petition in bankruptcy within one year
immediately preceding the commencement of this case.
(Bankr. Docs. SOFA #9.) In the Debtors’ Chapter 7 bankruptcy filings, the Debtors
disclosed no attorneys as having received a fee or entered an appearance on their behalf.
(APP28, Stip. of Facts ¶ 21.) Mr. Jonak’s services were disclosed only in the bankruptcy
schedules or statements of Debtors Carter, Bushman, Kersting. (Id. ¶ 23.)

4

Mr. Jonak has been associated with the following attorneys in connection with
his bankruptcy services: Greg Bilz, Dan Batten, Theresa Bailey, Karla Kluzak, Urosh
Piletich, Greg Gilbert, John Hedtke, Kyle Lewis, Michael Gerlack, Matthew Beaumier,
Sean Linnan, and Matt Lund. (Id. ¶ 22.)
8

Pursuant to 11 U.S.C. § 341, a United States bankruptcy trustee is required to
convene and preside at a meeting of creditors, at which the debtor is likewise required to
appear. At the meeting, the trustee is to question the Chapter 7 debtor under oath to
ensure that the debtor understands various aspects of filing for bankruptcy. 11 U.S.C. §
341(d)(1)-(4); 11 U.S.C. § 343. With respect to the Debtors here, no attorneys appeared
on their behalf at the meetings of creditors. (APP28, Stip. of Facts ¶ 21.) However, with
respect to a pro se questionnaire that pro se debtors are required to complete at their
meeting of creditors, 12 of the 18 Debtors listed ALC as the entity that “assisted me with
my bankruptcy filing.” (APP1319, 1327, 1344, 1352, 1376, 1384, 1400, 1408, 1416,
1431, and 1439.) At Debtor Jamie Shadley’s meeting of creditors, he testified that Jonak
“would help me through the process of bankruptcy,” by giving Shadley the “paperwork
that I needed, the correct paperwork that I needed to fill out and if I had any questions
that I would be able to find somebody that would answer them . . . .” (APP241, Shadley
Tr. at 13.)
The Bankruptcy Court noted in the Order that Mr. Jonak undertook the following
actions or gave the following advice to the Debtors:
a.

As to the matter of claiming exemptions for a bankruptcy filing, “we
could only do one or the other, we couldn’t do both, state or federal .
.. .” (Gjestvang Tr. 15.)

b.

As to (in the U.S. Trustee’s query) “. . . how the exemptions work,”
Jonak “just showed me numbers, what each of them meant . . . .”
(Cohen Tr. 8.)

c.

“. . . how it all worked, I just kind of wanted to make sure, . . . and
[Jonak] just kind of explained it to me, and I kind of went from there
on my deciding that I’d do it . . . .” (Sinn Tr. 11.)
9

d.

As to claiming the homestead exemption of 11 U.S.C. § 522(d)(1),
Jonak “probably explained it to me, and I went by what [Jonak]
said,” after Jonak “asking me about how much all my stuff was
worth . . . [and] I told [him] what it was worth . . . .” (Mattfield Tr.
12-13.)

e.

“That I could either file federal or state” as to claiming exemptions,
“but with my home, [Jonak] said that I should probably file state,”
which statement (from Jonak) the debtor termed “giving [me] some
advice in that regard.” (Pankiewicz Tr. 21.)

f.

That, by proceeding under Chapter 13, “on my child support that you
know, I’m in arrears 39 thousand over my payment plan, I would pay
12 thousand, and that would be it, it would go away.” (Pankiewicz
Tr. 26.)

g.

That a debtor who used a four-wheeler “at work at times, because
I’m a project superintendent, so I cover a lot of territory,” should
“put that under like tools” as exempt--“or, you know, there was a
state write-down for allotment for tools and stuff like that, [Jonak]
told me to put the four-wheeler under that . . . .” (Pankiewicz Tr.
28.)

h.

That the debtor could “keep” his or her house while going through
bankruptcy. (Boutin Tr.14; Mattfield Tr. 14; Pankiewicz Tr. 27.)

i.

“ . . . what chapter 7 is and what is 13 . . . .” (Carter Tr. 13.)

j.

“ . . . because I filed some student loan papers on there, student loan
ones and [Jonak] said those may not be dischargeable. . . ,” (Carter
Tr. 13), and nonetheless, “to just put them down just in case I can get
them discharged . . . .” (Id. 14.)

k.

“. . . if I wanted to keep my home, because I was behind on my,
some payments, that I would have to of course catch them up . . . .”
(Carter Tr. 14.)

l.

“. . . I shouldn’t have no problem with my bankruptcy because I owe
up so much that I can hardly make any payments . . . .” (Mattfield
Tr. 15.)

(Order at 18-19.) At least six of the Debtors were confused as to whether ALC was a law
10

firm or whether Mr. Jonak was a lawyer. (Id. at 16) (citing Rytty Tr. 10; Smith Tr. 6, 11;
Bushman Tr. 9; Gjestvang Tr. 13; Mattfield Tr.13; Pankiewicz Tr. 22).
B.

Procedural History

After conducting an investigation of Mr. Jonak’s conduct in the underlying
bankruptcy cases, the Trustee filed its Complaint against Jonak and his entities in
Bankruptcy Court. (APP1-20, Compl.) In the Complaint, the Trustee alleged that Jonak
violated five sections of 11 U.S.C. § 110, applicable to petition preparers, for: failing to
sign documents; failing to provide the required notice to debtors; failing to place
identifying numbers on the petitions; using the word “legal” in his advertisements; and
failing to file a declaration documenting the fees that he received. (Compl. at 13.) In
addition, the Trustee alleged that Jonak violated 11 U.S.C. § 526(a), applicable to debt
relief agencies, by failing to perform the promised services; by making false statements;
by misrepresenting his services; and by advising at least one debtor to incur more debt.
(Id. at 13-14.) Lastly, the Trustee alleged that Jonak violated 11 U.S.C. § 527 by failing
to provide the required notices, and violated § 528 by failing to identify his company as a
debt relief agency. (Id. at 14.) In relief, the Trustee sought to enjoin Jonak from
engaging in further violations of the law and also sought the imposition of statutory fines
and penalties. (Id. at 16-18.)
In his Answer, although Mr. Jonak admitted that he did not disclose his
participation in each debtor’s case or comply with § 110, he denied that § 110 applied.
(McDermott v. Jonak, 10-BR-05031, Answer at ¶¶ 93-98 (Bankr. D. Minn. [Doc. No. 8].)
Jonak asserted that he did not physically prepare the bankruptcy documents and therefore
11

was not a bankruptcy petition preparer. (Id.) Similarly, he denied that he was a debt
relief agency and therefore was not subject to §§ 526-28. (Id. ¶¶ 99-108.)
Ruling on the Trustee’s summary judgment motion, Chief Bankruptcy Judge
Gregory F. Kishel found that Jonak and his entities functioned as bankruptcy petition
preparers, were subject to the requirements of § 110, and violated several provisions
under the statute. (Order at 25-33.) In addition, the Bankruptcy Court determined that
Mr. Jonak offered and furnished legal advice and engaged in the unauthorized practice of
law under § 110 as well as Minn. Stat. § 481.02, Subd.1. (Id. at 23, 33-36.) The
Bankruptcy Court also found that Mr. Jonak engaged in fraudulent, unfair, and deceptive
acts prohibited by § 110. (Id. at 36-38.) As to the Trustee’s claims under §§ 526-28, the
Bankruptcy Court determined that ALC qualified as a debt relief agency and was
therefore obliged to comply with §§ 526-28 of the Bankruptcy Code. (Id. at 38-40.) The
Bankruptcy Court found that Mr. Jonak violated the provisions concerning clear and
conspicuous disclosures in advertising and in services to be rendered. (Id. at 40-41.) In
addition, Mr. Jonak was found to have misrepresented the services provided, fostered the
filing of untrue or misleading completed bankruptcy forms, and failed to provide various
notices and disclosures to the Debtors (Id. at 41-44.) Accordingly, pursuant to § 110 and
§ 526, the Bankruptcy Court enjoined him from committing any future violations of § 110
and § 526, and pursuant to § 110, the Bankruptcy Court ordered the forfeiture and
turnover of fees received. (Id. at 45-48.) The Trustee was also awarded liquidated
damages under § 110(i)(1)(B). (Id. at 47-48.)

12

On appeal to this Court, Appellants raise three issues. First, they argue that they
did not violate § 110 because they are not bankruptcy petition preparers. (Appellants’ Br.
at 9-13 [Doc. No. 13].) Second, even though they now concede that they are a debt relief
agency, Appellants assert that the Bankruptcy Court erred when it found that they
violated multiple sections of §§ 526-28. (Id. at 13-16.) Third, Appellants contend that
even if they violated §§ 110 and 526, the injunction is overly broad and should be limited
to bankruptcy-related activities. (Id. at 17-18.)
II.

DISCUSSION
This Court has jurisdiction over this appeal pursuant to 28 U.S.C. § 158(a)(2). The

Bankruptcy Court’s Order and Judgment on the underlying summary judgment motion
were issued on March 29, 2013. Appellants’ appeal is timely as the Bankruptcy Court
extended the time for appeal pursuant to Fed. R. Bankr. P. 8002(c) on September 5, 2013.
In an appeal from a bankruptcy court proceeding, the Court acts as an appellate
court. See 28 U.S.C. § 158(a). The Bankruptcy Court’s legal conclusions are reviewed de
novo and its findings of fact are reviewed for clear error. Tri–State Fin., LLC v. First
Dakota Nat’l Bank, 538 F.3d 920, 923–24 (8th Cir.2008); accord Fed. R. Bankr. P. 8013.
A bankruptcy court’s entry of summary judgment is reviewed by a district court de novo.
Tudor Oaks Ltd. P’ship v. Cochrane (In re Cochrane), 124 F.3d 978, 981 (8th Cir. 1997).
Summary judgment is proper if there are no disputed issues of material fact and the
moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a), as
incorporated by Fed. R. Bankr. P. 7056. The Court must view the evidence and the
inferences that may be reasonably drawn from the evidence in the light most favorable to
13

the nonmoving party. Enter. Bank v. Magna Bank of Missouri, 92 F.3d 743, 747 (8th Cir.
1996). The moving party bears the burden of showing that there is no genuine issue of
material fact and that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c),
as incorporated by Fed. R. Bankr. P. 7056; Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986); Enter. Bank, 92 F.3d at 747. A party opposing a properly supported motion for
summary judgment may not rest on mere allegations or denials, but must set forth specific
facts in the record showing that there is a genuine issue for trial. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 256 (1986). If a party fails to support an assertion of fact or
fails to properly respond to another party’s assertion of fact as required by Rule 56(c), the
court may “grant summary judgment if the motion and supporting materials – including
the facts considered undisputed – show that the movant is entitled to it. . . .” Fed. R. Civ.
P. 56(e)(3), as incorporated by Fed. R. Bank. P. 7056; Celotex, 477 U.S. 322-23.
A.

Section 110: Bankruptcy Petition Preparer

Section 110 of the Bankruptcy Code provides for the imposition of certain
penalties applicable to persons who negligently or fraudulently prepare bankruptcy
petitions. 11 U.S.C. § 110. Under the Code, a “bankruptcy petition preparer” is defined
as “a person, other than an attorney for the debtor or an employee of such attorney under
the direct supervision of such attorney, who prepares for compensation a document for
filing” in a bankruptcy case. Id. § 110(a). A “document for filing” refers to “a petition or
any other document prepared for filing by a debtor” in a bankruptcy court or United
States district court in connection with a bankruptcy case. Id. § 110(b). Bankruptcy
petition preparers are required to notify debtors in writing that they are not attorneys and
14

to provide their identifying information to the courts on any bankruptcy documents, sign
all such documents, provide copies of the documents to the debtors, and file a fee
disclosure statement. Id. § 110 (b), (c), (d) & h(2).
In addition, Section 110 prohibits certain conduct by petitioner preparers that may
be misleading or harmful to debtors, such as engaging in the unauthorized practice of law
by providing legal advice, advertising bankruptcy petition preparer services with the word
“legal” or similar terminology, collecting court filing fees from debtors, and violating
applicable state statutes prohibiting the unauthorized practice of law. Id. § 110(e)(1),
(e)(2), (f), (g), & (k). As to the prohibitions against legal advice, § 110(e)(B)(i)-(vii) bars
a bankruptcy petition preparer from offering a potential bankruptcy debtor advice on any
of the following: whether to file a petition or whether commencing a case under Chapter
7, 11, 12, or 13 is appropriate; whether the debtor’s debts will be discharged; whether the
debtor will be able to retain a home, car or other property after commencing bankruptcy
proceedings; the tax consequences of a bankruptcy case and the dischargeability of tax
claims; whether the debtor should promise to repay debts to a creditor; how to
characterize the nature of the debtor’s property interests or debts; and bankruptcy
procedures and rights.
Minnesota state law also prohibits the unauthorized practice of law. Minn. Stat. §
481.02, Subd. 1.5 The Bankruptcy Court found that in six of the 18 cases at issue, Mr.

5

The Minnesota statute against the unauthorized practice of law provides:
It shall be unlawful for any person or association of persons,
except members of the bar of Minnesota admitted and
15

Jonak engaged in the unauthorized practice of law within the scope of Minn. Stat. §
481.02, Subd. 1, contrary to 11 U.S.C. § 110(k), and gave legal advice, in violation of 11
U.S.C. § 110(e)(2). (Order at 23.) Although Mr. Jonak is not an attorney, the Bankruptcy
Court concluded that he gave “advice as to the bankruptcy process, the substantive law of
bankruptcy, and the effect of both on those debtors’ options in filing for bankruptcy.”
(Id.) Appellants do not directly challenge this determination on appeal.
As one court has observed, “So what does § 110 tacitly permit? The answer in a
nutshell is ‘not much.’” In re Grissett, No. 07-41510-R, 2008 WL 4553083, at *4 (Bankr.
E.D. Mich. Oct. 8, 2008). Rather, § 110 “proscribes virtually all conduct falling into the
category of guidance or advice, effectively restricting ‘petition preparers’ to rendering
only ‘scrivening/typing’ services.” Id. As the Grissett court noted, the case law makes it

licensed to practice as attorneys at law, to appear as attorney
or counselor at law in any action or proceeding in any court in
this state to maintain, conduct, or defend the same, except
personally as a party thereto in other than a representative
capacity, or, by word, sign, letter, or advertisement, to hold
out as competent or qualified to give legal advice or counsel,
or to prepare legal documents, or as being engaged in
advising or counseling in law or acting as attorney or
counselor at law, or in furnishing to others the services of a
lawyer or lawyers, or, for a fee or any consideration, to give
legal advice or counsel, perform for or furnish to another legal
services, or, . . . , or, for a fee or any consideration, to prepare
for another person, firm, or corporation, any other legal
document . . . .
Minn. Stat. § 481.02, Subd. 1.

16

“abundantly clear that providing anything more than typing services is prohibited under §
110.” Id.
When a bankruptcy petition preparer violates sections 110(b)-(g) or charges a fee
found to be unreasonable, courts may order that the fee be returned to the bankruptcy
estate. 11 U.S.C. § 110(h)(3)(B). If the preparer fails to comply with the court’s order, a
$500 fine may be assessed. Id. § 110(3)(A)(5). If the preparer is found to have
committed a fraudulent, unfair, or deceptive act, “the court shall order the bankruptcy
petition preparer to pay the debtor – (A) the debtor’s actual damages; (B) the greater of –
(i) $2,000; or (ii) twice the amount paid by the debtor to the bankruptcy petition preparer
for the preparer’s services; and (C) reasonable attorney’s fees . . . .” Id. § 110(j).
Although Jonak and 3rd Millennium admitted in their Answer that they failed to
comply with certain provisions of § 110, they argued in opposition to the Trustee’s
summary judgment motion that § 110 is wholly inapplicable to them, as they are not
bankruptcy petition preparers. (See Order at 32.)

Rejecting this argument, the

Bankruptcy Court considered ALC’s “‘business model’ and the functional aspect of its
actual, proven performance for the debtors within the eighteen cases.” (Id. at 27.)
Specifically, the Bankruptcy Court pointed to Jonak’s involvement in the preparation and
structuring of the necessary information, “not to mention his direct intervention in the
debtors’ substantive elections and choices for the bankruptcy process.” (Id. at 31.) Chief
Bankruptcy Judge Kishel found that these actions made Mr. Jonak a bankruptcy petition
preparer, in that virtually every act that Jonak did “aided the physical preparation of the
bankruptcy petition” that his customers eventually filed. (Id.) The Bankruptcy Court
17

noted that “[e]ven acting as a passive conduit toward someone who does the actual
typing, via ostensible ‘referral’ in the role of a ‘resource center,’ is enough to tie a
participant into petition preparer status – where the intermediary receives payment and
certainly where the channeling is directly to a single typist without the offer of a choice.”
(Id. at 29-30).
The Bankruptcy Court’s ruling is consistent with Eighth Circuit authority. The
Eighth Circuit in In re Garrison, 208 F.3d 217, No. 98-2714, 2000 WL 276975, at *3 (8th
Cir. March 15, 2005), held that a party who received money from a debtor in exchange
for bankruptcy filing assistance and merely “caused” the petition papers to be typed, was
a bankruptcy petition preparer. As the Trustee correctly observes, here, Mr. Jonak did far
more than simply cause the Debtors’ papers to be typed. (Appellee’s Br. at 24 [Doc. No.
25].)
Other courts have concluded that “[v]arious petition preparers across the country
have attempted to evade . . . regulations [such as § 110] by characterizing their services as
something other than bankruptcy petition preparation.” In re McCrary, No. 12-56446,
2013 WL 2947902, at *4 (E.D. Mich. June 13, 2013) (citing Ferm v. United States (In re
Crowe), 243 B.R. 43 (B.A.P. 9th Cir. 2000); In re Landry, 250 B.R. 441 (Bankr. M.D.
Fla. 2000)). Accordingly, “[i]t is important to focus on the substance of the preparation
services, rather than their form.” Id. Here, the Bankruptcy Court conducted just such an
analysis, concluding that “Jonak and his whole enterprise structure qualify as a
bankruptcy petition preparer because of what he actually did, regardless of what he called
his operation.” (Order at 27.)
18

The court in In re Duran, 347 B.R. 760 (Bankr. D. Colo. 2006), similarly
considered the underlying structure of an entity that called itself “Legal Aid Network.” In
the multi-party structure of Legal Aid Network, one person, Mr. Brown, was manager and
part owner, while another person, Ms. Johnson, typed the signed bankruptcy documents.
Id. at 763-65. Regardless of how Mr. Brown characterized his business, the court found it
to be more than simply a referral agency, but rather, found it to be a bankruptcy petition
preparer, subject to the requirements of § 110. Id. at 766-67. Notably, the court observed
that Mr. Brown: set the fee for the bankruptcy petition work; was the point of contact for
customers by virtue of Legal Aid Network’s advertisements; selected the person to
complete the contracted-for work; entered into an after-the-fact agreement with Ms.
Johnson to make it appear that she was an independent contractor; and directed all of the
activities of Legal Aid Network. Id. at 765-66. The Bankruptcy Court properly found
many of the facts and conclusions of Duran directly applicable to Mr. Jonak. (Order at
30-31.) The court in In re McCrary enumerated similar non-exclusive factors as
determinative of whether an entity is a bankruptcy petition preparer:
(a) whether it collected money from the debtor, (b) whether it engaged in
any conduct defined as unauthorized practice of law or otherwise in
violation of § 110 or related rules; (c) whether it encouraged or otherwise
played an integral role in allowing another party to violate any such rules;
(d) whether it acted as the “point of contact” or liaison between the debtor
and the preparer; (e) the extent to which it acted in concert with the
preparer; and (f) the extent of the preparer's control over the referring party,
i.e. whether there exists an agency or employment relationship.
2013 WL 2947902, at *4.

19

The record here amply supports the Bankruptcy Court’s ruling that Appellants
were bankruptcy petition preparers and that their actions violated § 110: Mr. Jonak
collected fees of $363 to $680 from the Debtors (APP23, Stip. of Facts ¶ 9); he used the
trade name “Affordable Legal Services,” see In re Ali, 230 B.R. 477, 482 (Bankr.
E.D.N.Y. 1999) (holding that use of words “law” and “court” gave clients the impression
that legal services were offered); advertised directly to persons needing bankruptcy
services in ads under the category of “Bankruptcy”; Mr. Jonak was the direct point of
contact between the Debtors and the ALC-selected typists; he handed out documents on
behalf of the typists, including, in some cases, the typists’ Questionnaire; he entered into
service contracts for “Bankruptcy processing (start to finish)” (see, e.g., APP137); and
Jonak provided a list of federal and state tax exemptions to the Debtors, directing them to
select one. (APP131-34.)

Most of the Chapter 7 Debtors’ pro se questionnaires

identified Mr. Jonak as a person who assisted them. (APP1317-1458.) Moreover, at least
six Debtors were confused as to whether Mr. Jonak was an attorney. (Order at 16) (citing
Rytty Tr. 10; Smith Tr. 6, 11; Bushman Tr. 9; Gjestvang Tr. 13; Mattfield Tr. 13;
Pankiewicz Tr. 22.) Several Debtors testified that Jonak provided substantive advice
regarding the claiming of various exemptions, the effect of Chapter 13 bankruptcy on
child support obligations, whether student loans were dischargeable, and whether the
Debtor would be able to keep a house. (Id. at 18-19) (citing Gjestvang Tr. 15; Cohen Tr.
8; Sinn Tr. 11; Mattfield Tr. 12-15; Pankiewicz Tr. 21, 26-28; Boutin Tr. 14; Carter Tr.
13.) In addition, as discussed herein, the Bankruptcy Court found Mr. Jonak to be
engaging in the unauthorized practice of law. (Id. at 23.) These actions fall squarely
20

within the enumerated prohibitions of § 110(e)(B)(i)-(vii) such that Chief Bankruptcy
Judge Kishel observed, “[t]he matchup between the sorts of advisories that Jonak gave to
various ALC customers . . . to the types of advice prohibited by section 110(e)(2)(B) is
almost eerie.” (Id. at 34.)
In any event, Appellants do not challenge the Bankruptcy Court’s findings that
they violated the specific provisions of § 110 – instead, they simply argue that this
provision is inapplicable to them, because of their contention that they are not bankruptcy
petition preparers. Although Jonak contends that he merely provided “a referral to
professionals who do the actual work” (Appellants’ Br. at 12 [Doc. No. 13]), the evidence
demonstrates otherwise. Moreover, comments to the Minnesota Rules of Professional
Conduct define a legal service plan as a “prepaid or group legal service plan . . . that
assists prospective clients to secure legal representation.” Minn. R. of Prof’l Conduct 7.2,
Comments [6]-[7]. Lawyer referral services are defined as “any organization that holds
itself out to the public as a lawyer referral service.” Id. While lawyer referral services
and legal service plans may communicate with prospective clients, any such
communications, including advertising, must be consistent with the rules and not be false
or misleading. Id. The Rules of Professional Conduct further provide that
communications “must not be directed to a person known to need legal services in a
particular matter,” but must generally inform potential plan members of “another means
of affordable legal services.” Id. 7.3, Comment [8]. The evidence demonstrates that Mr.
Jonak’s services do not conform to these requirements: he did not sell pre-paid legal
services to the Debtors (APP25, Stip. of Facts ¶ 12), he targeted his advertising directly at
21

persons seeking bankruptcy relief (APP55-75), did not provide unbiased attorney referrals
(APP26, 28, Stip. of Facts ¶¶ 14, 21), and referred the Debtors almost exclusively to a
single typist. (Order at 30.) Whatever the nomenclature used by Mr. Jonak to describe
his services, the Bankruptcy Court correctly found him and his business entities to be
bankruptcy petition preparers, operating in violation of § 110.
For the additional reason that ALC has not appealed the findings of violations of §
110(b)(1), (b)(2), (c), (f), and (h)(2), and because the evidence demonstrates such
violations, the ruling of the Bankruptcy Court is affirmed with respect to the Trustee’s §
110 claim.
Finally, the relief granted by the Bankruptcy Court based on the § 110 violations is
proper and is affirmed. Pursuant to § 110(h)(3), the Bankruptcy Court ordered Appellants
to surrender the monies paid to them by the Debtors. (Order at 45-46.) The parties
stipulated to these amounts. (APP23-24, Stip. of Facts ¶ 9.) In addition, citing § 110(j),
the Bankruptcy Court properly issued an injunction against 3rd Millennium and Mr. Jonak,
“personally and through the instrumentality of any other artificial business entity,”
prohibiting them from committing any future violations of § 110. (Order at 47.) The
Bankruptcy Court awarded liquidated damages pursuant to § 110(i)(1)(B). (Id.) As the
court noted, that provision requires an award to the Debtors in each case of the greater of
$2,000 or twice the amount of the fee paid by the Debtors in each case. (Id.) Because the
largest such fee was $680, the Bankruptcy Court awarded the greater amount of $2,000
per case. These liquidated damages are mandated by statute. All other relief awarded by
the Bankruptcy Court is proper and is affirmed.
22

B.

Sections 526-28: Debt Relief Agency

A “debt relief agency” includes “any person who provides any bankruptcy
assistance” to a consumer debtor for valuable consideration, subject to certain exceptions.
11 U.S.C. § 101(12A). “Bankruptcy assistance” is defined as “any goods or services sold
or otherwise provided to an assisted person with the express or implied purpose of
providing information, advice, counsel, document preparation, or filing, . . . with respect
to a case or proceeding under this title.” Id. § 101(4A). Pursuant to 11 U.S.C. § 526, the
a debt relief agency shall not
(1) fail to perform any service that such agency informed an assisted person
or prospective assisted person it would provide in connection with a case or
proceeding under this title;
(2) make any statement, or counsel or advise any assisted person or
prospective assisted person to make a statement in a document filed in a
case or proceeding under this title, that is untrue or misleading, or that upon
the exercise of reasonable care, should have been known by such agency to
be untrue or misleading;
(3) misrepresent to any assisted person or prospective assisted person,
directly or indirectly, affirmatively or by material omission, with respect
to-(A) the services that such agency will provide to such person; or
(B) the benefits and risks that may result if such person becomes a
debtor in a case under this title; or
(4) advise an assisted person or prospective assisted person to incur more
debt in contemplation of such person filing a case under this title or to pay
an attorney or bankruptcy petition preparer a fee or charge for services
performed as part of preparing for or representing a debtor in a case under
this title.

23

Under 11 U.S.C. § 527, a debt relief agency must make certain disclosures to
assisted persons. They must provide notice of the various chapters available in
bankruptcy, as well as notice that all information required of an assisted person must be
complete, accurate, and truthful. 11 U.S.C. § 527 (a)(1)-(2). In addition, a debt relief
agency must provide notice to an assisted person stating that an attorney or debt relief
agency must provide a written contract specifying the work to be performed and the cost.
Id. § 527(b). A debt relief agency must also provide notice to the assisted person on how
to provide certain disclosures in bankruptcy. Id. § 527(c). Finally, a debt relief agency is
required to maintain a copy of all such required notices for a period of two years. Id. §
527(d).
Section 528 of the Bankruptcy Code requires certain disclosures that are “intended
to combat the problem of inherently misleading commercial advisements – specifically,
the promise of debt relief without any reference to the possibility of filing for bankruptcy,
which has inherent costs.” Milavetz, Gallop & Milavetz, P.A. v. United States, 559 U.S.
229, 250 (2010). This provision is “expressly concerned with advertisements pertaining
to ‘bankruptcy assistance services,’ ‘the benefits of bankruptcy,’ ‘excessive debt, debt,
collection pressure, or inability to pay any consumer debt.’” Id. (citing §§ 528(a)(3) &
(b)(2)). Specifically, a debt relief agency must clearly and conspicuously disclose in
advertisements for “bankruptcy assistance services” or the “benefits of bankruptcy” that
such services or benefits are with respect to bankruptcy relief under the Bankruptcy Code.
11 U.S.C. § 528(a)(3). In addition, a debt relief agency must disclose that its “assistance
may involve bankruptcy relief.” Id. § 528(b)(2)(A). Moreover, such advertisements
24

must also include the following clear and conspicuous disclaimer: “‘We are a debt relief
agency. We help people file for bankruptcy relief under the Bankruptcy Code’ or a
substantially similar statement.” Id. § 528(a)(4) & (b)(2)(B). Finally, § 528 requires that
debt relief agencies provide assisted persons with a written contract explaining what
services are to be provided and what fees are to be paid. Id. § 528(a)(1) & (2).
Remedies for violations of §§ 526-28 may take the form of a civil action by the
debtor to recover actual damages, including any fees already paid. 11 U.S.C. § 526(c)(2).
In the case of intentional violations, or a pattern or practice of clear and consistent
violations, the court may enjoin the violation or impose an appropriate civil penalty,
either sua sponte or at the request of the United States trustee or the debtor. Id. §
526(c)(5).
The Bankruptcy Court found that Mr. Jonak violated §§ 526(a)(1)-(a)(3) and
527(a)(1)-(2), and enjoined ALC from future violations of §§ 526-28. (Order at 38-45.)
The Bankruptcy Court did not impose additional monetary penalties on Appellants for
violations of these provisions, finding the § 110 disgorgement and award of liquidated
damages sufficiently punitive. (Id. at 48.)
On appeal, Mr. Jonak now concedes that he operates as a debt relief agency and is
subject to §§ 526-28. (Appellants’ Br. at 14 [Doc. No. 13].) Jonak further admits to
violating the requirement that his advertisements disclose that his businesses operate as
debt relief agencies. However, he argues that he did not violate any of the other debt
relief agency provisions identified by the Bankruptcy Court. (Id. at 14-16.) Specifically,
Mr. Jonak claims that he did not misrepresent his services, did not cause untrue or
25

misleading statements to be filed by the Debtors, and that he provided the notices
required by § 527(a). (Id.) Accordingly, he seeks remand so that the penalties imposed
by the Bankruptcy Court may be modified. (Id. at 16.)
1.

Notices

Mr. Jonak admits that he violated § 528(a)(4). (Id. at 14.) This provision requires
a debt relief agency to clearly and conspicuously include in any advertisement the
specific language “We are a debt relief agency. We help people file for bankruptcy relief
under the Bankruptcy Code.” 11 U.S.C. § 528(a)(4). As the Trustee notes, because this
Court may affirm on any basis supported by the record, Jonak’s admission that he
violated § 528(a)(4) provides a basis for affirming the Bankruptcy Court’s ruling on the
Trustee’s § 528 claim. See Fullington v. Pfizer, Inc., 720 F.3d 739, 747 (8th Cir. 2013)
(noting that an appellate court may affirm the lower court’s dismissal on any basis
supported by the record). Nevertheless, the Court considers Appellants’ specific
challenges to the ruling concerning other claims under § 528, as well as claims under §§
526-27.
Mr. Jonak does not admit to violating § 528(a)(3). Similar to § 528(a)(4),
discussed above, this provision requires a debt relief agency to clearly and conspicuously
state in any advertisements that the services or benefits it offers are with respect to
bankruptcy relief under the Bankruptcy Code. The Court agrees with the Bankruptcy
Court that while references to “bankruptcy” and “a low cost bankruptcy discharge”
arguably refer to bankruptcy relief under the Bankruptcy Code, the statute is literal in its
directive. (Order at 41, n.34.) Accordingly, by failing to provide the clear and
26

conspicuous statement, Jonak violated § 528(a)(3). The Bankruptcy Court’s ruling as to
this claim is affirmed.
In addition, the evidence shows no disputed issues of fact with respect to
Appellants’ violation of 11 U.S.C. § 527(d). This provision requires a debt relief agency
to retain a copy of the notices required under § 527(a) for two years. Mr. Jonak did not
produce these notices and the mere act of occasionally handing out the processing
center’s Questionnaire – which did include the notices required by § 527(a) – does not
constitute compliance. To the extent that Jonak handed out the Questionnaires, they were
the product of his processing center typists, and not evidence of his own compliance, nor
did Jonak personally provide the Questionnaires to every customer. (APP25, Stip. of
Facts ¶ 5.)
2.

Misrepresentations

As to Mr. Jonak’s appeal of the Bankruptcy Court’s ruling that he misrepresented
his services to the Debtors in violation of § 526(a)(3)(A), and that he failed to clearly and
conspicuously disclose the services to be rendered in violation of § 528(a)(1)(A), the
evidence in the record fully supports Chief Bankruptcy Judge Kishel’s ruling. As noted,
the use of the word “law” in Mr. Jonak’s “Affordable Law Center” business
misrepresented Jonak’s services – he is not an attorney and is unable to provide legal
services. See In re Ali, 230 B.R. at 482. In addition, Mr. Jonak advertised in the
bankruptcy attorney section of telephone books, claiming to offer “Bankruptcy/Credit
Restoration” (APP62-66, Jonak Dep., Ex. 3), and advertised in newspapers under the
“Bankruptcy” category. (APP70-75, Jonak Dep., Ex. 5.) The Bankruptcy Court further
27

found that Jonak’s ads fail to fully disclose the legal plan or referral services that Jonak
claims to provide, and that Jonak’s flat fee for bankruptcy services deceptively fails to
reference the additional costs for a typist or an attorney. (Order at 38.) Moreover,
although Mr. Jonak’s documentation to customers promised “start to finish” services, debt
settlement, credit counseling, and social security services (APP27, Stip. of Facts ¶ 17), he
was not licensed, in fact, to provide any debt settlement or counseling services. (Id. ¶ 18.)
Moreover, as the Bankruptcy Court found, Mr. Jonak significantly misrepresented his
services by characterizing his services as a “legal plan.” (Order at 37.) The evidence
shows that Mr. Jonak did not procure any legal representation on the Debtors’ behalf.
In addition, this Court agrees with the Bankruptcy Court that certain
acknowledgments and self-serving disclaimers in the ALC documents – “I have not
received legal advice” (APP125) and “I do not believe the adverti[s]ing I responded to
was misleading in any way” (APP126) – were designed to circumvent the Bankruptcy
Code’s prohibitions in § 110 through forced admissions. (Order at 38.) These
disclaimers underscore Mr. Jonak’s efforts to evade the requirements of the Bankruptcy
Code.
To the extent that Mr. Jonak argues that summary judgment is precluded because
the Bankruptcy Court lacked undisputed evidence that Jonak’s “services would be
exclusively handled by its staff without consulting or working with qualified
professionals” (Appellants’ Br. at 15 [Doc. No. 13], this argument fails. While evidence
is viewed in the light most favorable to the non-moving party, Enter. Bank, 92 F.3d at
747, the non-moving party must set forth specific facts in the record showing a genuine
28

issue of disputed fact. Anderson, 477 U.S. at 256. Jonak has offered no evidence to
support an inference that he orally informed customers that debt negotiation and credit
restoration services would be referred to legally qualified persons. Accordingly, the
Bankruptcy Court’s ruling on these claims is affirmed.
3.

Fostering the Filing of Untrue or Misleading Statements

The Bankruptcy Court also found that Mr. Jonak caused the Debtors to make
untrue or misleading statements in their bankruptcy documents, in violation of 11 U.S.C.
§ 526(a)(2). (Order at 42-45.) Neither Jonak’s role nor fee were disclosed in the
Statement of Financial Affairs submitted in 15 of the 18 cases. (APP474, APP545,
APP591, APP633, APP677, APP738, APP803, APP870-71, APP986, APP1061,
APP1112, APP1164, APP1219, APP1285.) As noted by the Trustee, omitting the role of
a bankruptcy preparer in bankruptcy filings constitutes a statement made in a document
that the preparer knew was misleading under § 526(a)(2). In re Peckham, No. 9:13-bk04690-FMD, 2013 WL 5984467, at * 4 (Bankr. M.D. Fla. Nov. 12, 2013). In contrast, as
the Bankruptcy Court observed, the processing center – which charged a significantly
smaller fee – was disclosed in each case. (Order at 43.) Because Mr. Jonak provided
advice on completing the forms and often provided the typist’s Questionnaire to
customers, the Bankruptcy Court properly concluded that Mr. Jonak had ample
opportunity to ensure that disclosure was made. (Id.) Accordingly, the Bankruptcy
Court’s ruling on this basis for the § 526 claim is affirmed.

29

C.

The Scope of the Injunction

The Bankruptcy Court enjoined Jonak from “providing any bankruptcy assistance
within the meaning of § 101(4A) to an assisted person for compensation, without giving
all disclosures required by 11 U.S.C. §§ 527 and 528(a), with the full wording and
content specified by those provisions.” (Order at 54, ¶ g.) The injunction does not extend
beyond filing a bankruptcy case in the District of Minnesota. (Id. at 52-55.) Moreover,
the entire scope of the Order concerns conduct related to the services offered with regard
to filing bankruptcy cases. (Id.) The Order cites 11 U.S.C. §§ 110(j)(2)(A) and 526(a) in
support of the ruling. (Id. at 52.) Two subsections of the injunction, (h) and (i), (id. at
54), prohibit for-profit referrals to attorneys, as discouraged by the Minnesota Rules of
Professional Conduct, and (j) refers to bankruptcy-related actions. Accordingly, this
Court finds that the injunction is sufficiently clear in its scope, is supported by law and is
affirmed.
THEREFORE, IT IS HEREBY ORDERED that:
1.

Appellants’ Appeal from Bankruptcy Court [Doc. No. 1] is DENIED; and

2.

The Bankruptcy Court’s March 29, 2013 Order and March 29, 2013
Judgment are AFFIRMED.

Dated: May 28, 2014
s/Susan Richard Nelson
SUSAN RICHARD NELSON
United States District Judge

30