Can I have another one? Mr. Schien, ready? Rebidled, Mr. Schien? Yes, I'd like to take a five minutes or time for a little. Let's try and see if this is sign off. Again. Mayor, please declare it, John Schien, for the United States trustee. There are three basic statements in this case for which judge segment sanctioned the Udruan firm. And these are one misdewel statement that the tailors lacked equity in their home to her statement that the original proof of claim was correct as filed. And third, her statement in the motion of Rally from State that the tailors had missed their payments beginning in November 2007. Mr. Schien, if I could just interrupt you with something in the nature of a threshold question, because we're dealing with bankruptcy rule 9,011. And frankly, if I said I'm not an expert in bankruptcy, it would be one of the understatements of the year. But I query whether we have ever in a presidential opinion declared that our rule 11 jurisprudence is transferable to or automatically applicable in the 9,011 context. I think we've only got a few opinions dealing with 9,011. Do you have any position on that, or do you know whether we've spoken in some way that I've missed? Now, the general rule is that the Rally is considered persuasive in 9,011 cases. Most of the terms of the two sections are identical, and where there is identical language, bankruptcy, where it's usually a look to Rally 11 cases for guidance. And I don't have two in front of me right now. I believe there may be some technical differences between the two where they would not have all of them, but I'm not sure any of those differences come into play in this case. And going back to these three statements, I think what's notable here is that for the first two of them at least there is really no factual issue that's in dispute for this appeal. It's unisputed that, for example, that the tailors did have equity in their home at the time of their case filed. It's also unisputed that the original HSBC claim contained errors. And in both cases, we know that because HSBC eventually filed a amended group claim to correct it. They seem, Mr. Shea, to be stakes and errors that lawyers make from time to time their flubs and pleading
. Sort of like ministerial errors that a lawyer might say, oh, she's, I got that one wrong. Let me fix it. Is that the kind of thing that warrants or justifies a sanction like this? Well, what significant varies, the judge's statement did not sanction the Udruan firm on those two points because the pleadings were wrong. Judge Sigmund sanctioned them because she had testimony from Ms. Doyle that revealed that Ms. Doyle had really done absolutely nothing to verify those pleadings before she filed them. Well, didn't the bankruptcy court include in the basis for sanction a representation that Ms. Doyle made in the lift stay motion? It wasn't, wasn't she sanctioned in part for the statement debtors have failed to make payments to discharge the arirages on the mortgage or have failed to make the current monthly payment on the mortgage since the filing of the chapter 13 petition or have failed to do both. And wasn't that, in fact, given the disjunctive nature of the declaration correct in one of the disjunctive respects? Well, we, you know, I think the question here basically is how do you naturally read that language? And, well, the first question is, wasn't that a basis for the sanction or have I read the basis for the sanctions? There were actually, yeah, without, without statement right there, and we're actually the third, have the three basis that I mentioned at the outset. There's actually two alternative basis before the sanction there. The first basis is simply that this statement is wrong, that you, that you can read that statement is saying that the, that the tailors have paid nothing since the commencement of the bankruptcy case or at least since, since November 2007. And as the eutron firm's own brief reflects that statement on its basis not correct. Well, I said there were minor matters, but from yesterday on point of misrepresentations. It's misrepresent, right. And it is a matter of fact. But debtors had failed to make some payments, hadn't they? Right. They were not current, they were not current on their mortgage at the time the motion was filed. So that statement was at least technically correct, wasn't it? Right. And that actually leads into the alternative basis for Judge Sigmund's ruling, which is that even if you read that paragraph the same way that the eutron firm does, including, yes, this was correct in some technical sense. At the very least, it is misleading. It's misleading because the only thing that makes this statement correct technically is the fact that you had a payment that was not credited to her account because it went into the suspense account instead. Now, the suspense account was mentioned on page two of this quitting, but there was no, no explanation of what it means for payment to be in suspense. The tailors are only to understand that the tailors lawyer can't understand that and Judge Sigmund
. When would the failure to make one single payment, one month's payment, be sufficient to justify the stay? Now, the standard for relief under Section 362 of the bankruptcy code is the secured lender has to generally show a lack of protection for its secure interest. And in extreme cases, a payment to fall to loan may have been a Stoyle's application done that. Again, there's no single bright line test for when the LFSA motions granted. A lot of facts come into play and the default is one, but realistically, a judge will also look at whether the debtors have been attempting to keep current or at least making some payments as opposed to a debtor that is simply stopped paying altogether. And a debtor who's not paying altogether, which is, again, we believe the natural reading of that paragraph is much stronger case for relief from the automatic stay than a debtor who is a turns out with simply perhaps $200 per month behind and a few weeks late on the payments. And in fact, it's notable that when Judge Sigmund did find out the true nature of the payment history here, she denied the automatic stay motion. May I ask something from a slightly different approach here? Hasn't this circuit court uniformly required notice of the form of sanctions before it will allow a judge to impose sanctions? Isn't that correct? That is correct, and that's also what is required by 9011c2 and the issue. And isn't the former sanctions really something that could be very crucial in mounting a defense to a motion for sanctions? It would seem to me to be a pretty important part of a sanctions proceeding, wouldn't it? That is, and if I can address that for a minute. And where is the notice of the form of sanctions in this case? It's in a few places. You have the, you know, first of all, the written order that commenced this was the June 9th order, which is on page 96 of the record. And if you look at, um, the footnote one of the first page, where Judge Sigmund sets out the factual basis for the inquiry, she does mention the signing and filing pleadings without knowledge or inquiry. Can you give me that page again? I, uh, this is a relief on page 96 of the, of the record. Thank you. And again, um, the relevant language is in footnote one, bottom of that page. And as we are going to brief, we take the position that this does put the eutern firm on notice for exactly what they were, what they were eventually sanctioned for. And on top of that, even though I will, can not work over a section for it, but the form of the sanctions. Right. And, and in the context of this, and we believe you do have to look at context, this came right after a hearing on June 5th, where, um, again, Judge Sigmund orally notified the eutern firm that she was considering sanctions for filing these things without any knowledge. And then the opening statement at the hearing on July 23, which I believe, I believe I think we miss, I think we miss identified as being a June 9th hearing in our brief, but the July 23 hearing, this is on, um, the July 23, 23rd hearing, she does specifically mention the roll 90 11 obligation. Um, and again, a few points here. One is that to prevail, Mr. Shin, you have to show that the district court was wrong in concluding this layered approach that the bankruptcy judge abused its discretion. Is that, is that the accurate? Well, I'm, is it not an abuse of discretion standard? It isn't abuse of discretion standard
. What I'd like to point out, then you have to show that the district court was wrong in concluding that the bankruptcy judge abused her discretion. Is that right? That's not quite right. Actually, your standard overview over the district work is plenary. And that, um, what that means to what? Well, as to you, you, you're not whether or not sanctions were appropriate. In the sense that you, your view that the bankruptcy judge's decision under the exact same standards, I thought we said the same position is the district court. We're looking at whether the bankruptcy court abuse its discretion. So, so our review of the district court is plenary in that we're reviewing in the same way the district court did. Right. Right. And in terms of what the bankruptcy court did in imposing sanctions, well known, that is an issue for abuse of discretion. That is correct. What should we not be looking at the sanctions here and separating out the sanctions as they are imposed upon each individual and the firm differently? And if so, what is the basis in the rule? Well, we're in any kind of rule 11 jurisprudence that you know of for sanctioning Mr. Yudrin. For as I understand it being responsible generally for the culture of the law firm, I didn't see anything linking him directly to the filing of a single pleading or submission. And I read the record. I read all the testimony. In fact, he was a witness. He testified to how literally knew about new track and he testified that he had no involvement all with this particular matter. How can we sustain sanctions this to him? Well, in terms of the basis for the sanction against Mr. Ugrin, that is in fact in the text of county 11, that 9011 see which, you know, which is precisely provides that a person responsible for another attorney's rule 9011 violation may himself be sanctioned. Now, whether Mr. Yudrin was responsible. All right
. That's what it says. How is he responsible for it? Well, that is a finding fact and there are two. I mean, should we impose some kind of proximate cause test here? And if so, just how proximate is that? If somebody is sloppy and places the incorrect entry of an amount in a submission that's inconsistent with what was in a proof of claim? Well, the standard, I mean, again, this is a factual finding and your standard of review of Judge segment here is here. So really the issue for this court is whether there was any basis in the record for her to include as she did the Mr. Yudrin was responsible for the again for the culture for the policies that led to the roll 9011 missteps. Do you know of any support in any of the rule 11 cases for a determination that is so attenuated in a causative way for responsibility for a sanctionable act or in action? Where we're virtually no case law in other direction discussing the responsible for prong of 9011. Can you sanction the captain of the ship for the bad behavior of the crew? Well, again, that's a factual question. If the factual question. Well, if it's a factual determination, then it's completely unbounded and the courts, the district courts under 11, the bankruptcy courts under 9,000 11 can sanction whoever they want to so long as they can find out there somewhere in the universe in an actual cause sense, some responsibility for what ultimately occurs in the courtroom or through some filed submission. Well, again, it's a question drawn line. And certainly if this court feels looks at the record and the rules that that was a completely unfounded factual finding by judge segment, you can reverse that part of her for rolling under the clear air standard. You have you have some time for a bottle maybe you can come back and respond and great detail, Mr. Sheen. Thank you very much, Mr. Bart. Thank you, Your Honors. Jonathan Bart, well, enscouldment and spitzer on behalf of the Udren firm, Lorraine Doyle and Mark Udren. When David Fitzgibbons, a first year associate, stood before Judge Sigmund on May 1st, which started these proceedings, I don't think anybody had any idea that the fact that a motion for relief from state proceeding as to which repeated false representations had been made that payments had actually been made, which weren't the case. And so, the fact that the motion for relief from state of the court, which was a current meeting, would end up leading to a motion for sanctions and an opinion which has the U.S. trustee here because it's become a cause to lab, it's a political issue, not a small sanctions hearing involving a first year associate. Should the practice lapses or worse perhaps of better's council be any kind of factor in our determination and in fact, was it correct for the district court to consider that at all in its determination over the propriety of the sanction? Well, I think that it is absolutely required in this case, Your Honor, because the context in which the misrep- well, I don't think that my clients made any misrepresentation. The fact that this is the case, I think they're all literally true and we point that out
. The payment default from the start at all times. So, let me just to follow up this this one, when I think it is a point, which is the context, which is the computers that are feeding information and that lawyers are taking information that is being put into pleadings without investigating, necessarily investigating what that information is, is part of this case. Well, I think that there is, I don't know if it excuses the conduct. Well, I think we all know of the Hill decision that came out of Western Pennsylvania recently in state court in which lawyers admitted that they didn't even review pleadings that were filed. Reasonable investigation is at the very heart of what rule 11 is about. That's absolutely correct, Your Honor. And sounds like you're throwing a talent. No, not at all. I think reasonable investigation actually occurred in this case. How can reasonable investigation occur when you actually have a document in your possession that states a factor in this case, a figure that is completely contrary to a figure you yourself then place in a submission to the court, a pleading? Well, different from what you have and what that was provided to you by. You're referring obviously now to the proof of claim, which my client did not file. The objection to the proof of claim. I'm referring also to the motion for stay. The motion for a stay. I'm not aware of any motion. Sorry, the motion for relief from stay. The motion for relief stated two things. One, that there had they were three payments behind. And that two payments had not been made at all. One was in suspense. That's what it says. There was a suspense account right there as of the time of the filing, which is January 15th. The September payment had been made short
. There was no flood insurance payment made. Then the October payment came in in the same amount. No payment at all was received in November. No payment at all was received in December. At the time the motion was filed, they were two months full behind, plus another month in which they were bought, they were short. And the motion reflected that there was a suspense account with a balance which was being credited to their accounts. So there's nothing at all false about that. The other aspect of the motion for relief from stay was an allegation that there was no equity in the property. And it was not necessary to a reorganization. There was already a judgment in this case. But there was equity in the property. No, there was not as... It's not of record whether there was equity or honor. However, this house eventually went to Sheriff's Hill and was taken on the red after the debtors defaulted in bankruptcy. There was no equity. There was no bidders at the Sheriff's Hill. It went for less than the amount. If you look at the schedule's file by the debtor, there are massive confusion and misinformation. And one point the schedule said, one, it didn't list the judgment. Secondly, it lists the.
.. You're talking about... I'm sorry. You're talking about the misrepresentations made by the debtor? I'm talking about the evidence of whether there was equity in the property. The first all, it was never an issue in the case. What happened is in the proceedings which went on all summer, the trustee asked Miss Doyle what she knew about the equity in the property. But the motion wasn't pushed. I thought Mr. Bart that the representation was made that there was no equity in the property. In the motion for relief, the alternate grounds were released. The equity court disputed that and it was never... She was never challenged in her dreams. First of all, there was a series of requests for admission which asked the debtors to admit went to a turn. And here's where the attorney involvement occurs again, Your Honor. Whether there was any equity in the property, they were not answered. So they're deemed admitted. So that's what was before the court. What really annoyed Judge Sigmund is the fact that an unanswered series of requests for admission were proffered. But that's the responsibility of the debtor's counsel who didn't answer them
. At the hearing, Miss Doyle said, what they asked her, what was the basis for your allegations? I know where the property is and I didn't believe there was any equity in that property, which turned out to be true. You would not dispute that the heart of the problem here is that information is taking from a computer and that information is included in court pleadings. But you don't dispute that some of that information was just dead wrong. Not the information that the eugern firm got. It was the Moss-Kadilis firm, which did the proof of claim that got the incorrect information. Well, but didn't Miss Doyle then, in response to a claim objection state, that all figures contained in the proof of claim or action? Well, she did your honor. But you have to look at that in the context of the objection, the only objection... But your position then has to be that she had no obligation to go beyond what was on the face of the POC filed by another firm. What I'm saying is she had no obligation to go beyond the face of what was in the objection. The only thing that was in the objection was an objection to the... Well, then answer my question. Did she or did she not have an obligation to look behind what was in the POC that she and her firm did not prepare, but that another firm had prepared and upon which she apparently relied on. But I don't think that she did. The only issue when the... You can't contend that the contents are accurate without having some basis to stay. Can you accept the factor, Your Honor, is that the objection was limited to flood insurance charges, which the judge found were properly imposed. It had nothing to do with HSBC or UDR
. And it was imposed by FEMA doing a map plan. And the record shows that both the UDR and firm and HSBC on three separate occasions provided information either to Miss Hamer, the debtors' counsel, or to the debtors themselves on how to eliminate the flood insurance. But it was part of the judgment, and that was the only objection. Is it... I mean, if you're asking, was... Did she review every aspect of the proof of claim before making that statement? I think the answer is almost certainly no. The POC was not exactly a lengthy and complex document. It wasn't, but she was defending the objection. But let me... I raised a question with Mr. Sheen, and I actually alluded to it again with you, intending it to be something of a softball. But let me take you back to the representation that Ms. Doyle made in the disjunctive that in the motion, that debtors have failed to make payments to discharge the arirages on the mortgage, or have failed to make the current monthly payment on the mortgage since the filing of the chapter 13 petition, or have failed to do both. My understanding was that that was at least a basis, one basis that the bankruptcy court used for its sanction. And I understand Ms. Sheen to be taking the position that really is inaccurate. It really is a misrepresentation
. I want to know from you if that is the case, or if rather at least one disjunctive portion of that representation is facially accurate. Well, clearly it's accurate, Your Honor, because I already went over the payment history. So the bankruptcy court can at least be said to have been long in using this as a basis? Right. And I think you also have to look at what Judge Fullham said in his opinion. The May 1st hearing, Judge Sigmund stated on the record that no sanctions would be imposed as a result of the filing of the motion for relief, although she wasn't happy that Mr. Fitzgibbins had come there that day after the two payments, which had been represented to be made in January, had just been received in late April. But Mr. Fitzgibbins, but she's brighter than anybody else. That's correct, well other than the debtors' counsel. But the fact remains, Your Honor, that the judge said there will be no sanctions. I'm going to give you a break. There are going to be no sanctions as a result of the motion for relief. And then she issued the order to show cause as a result of yet another debtor's misrepresentation that she had been asking Mr. Fitzgibbins for months for a complete accounting. She had not. She had not. What doesn't make sense is that she issues in order to show cause involving hearings and sanctions on the basis of the debtors' misrepresentation. That's correct. And that's been what I've been trying to... Maybe Mr. Shean can clarify that. Yeah, I mean... It doesn't make sense that she would want to sanction the party that allegedly didn't make the misrepresentation. I think that what this court stated in the Felheimer case, which was very surprising to me that the trustee would rely on this language, because if the Felheimer case is really what's required for a suespaunti after the fact no safe harbor imposition of sanctions under 9011. Okay, speaking of sanctions and Judge Viennett Tervin had asked about it, maybe he has another question about that, but I'll go ahead and ask, weren't you on notice that you were the hearings, there were four days of hearings, if I remember correctly, that you were notified that you were... That you may be sanctioned for the conduct before the bankruptcy court. Right, but I think that what the case law says, even if this court doesn't feel like adopting the Pennian Edmund standard, that the second circuit has imposed requiring subjective bad faith for a suespaunti 9-11 motion, the fact is that our own opinions all say that the conduct must be very specifically... Well, you think about the merits, I'm talking about the notice, were you aware when you were going into those hearings that you were about to be sanctioned or that sanctions could be imposed? We were only aware... Well, I mean the order speaks for itself, but it was the first thing I complained of in the hearing that it doesn't say what behavior we had all heard... Well, let me be ju... Let me be ju.
. Yeah, I mean... It doesn't make sense that she would want to sanction the party that allegedly didn't make the misrepresentation. I think that what this court stated in the Felheimer case, which was very surprising to me that the trustee would rely on this language, because if the Felheimer case is really what's required for a suespaunti after the fact no safe harbor imposition of sanctions under 9011. Okay, speaking of sanctions and Judge Viennett Tervin had asked about it, maybe he has another question about that, but I'll go ahead and ask, weren't you on notice that you were the hearings, there were four days of hearings, if I remember correctly, that you were notified that you were... That you may be sanctioned for the conduct before the bankruptcy court. Right, but I think that what the case law says, even if this court doesn't feel like adopting the Pennian Edmund standard, that the second circuit has imposed requiring subjective bad faith for a suespaunti 9-11 motion, the fact is that our own opinions all say that the conduct must be very specifically... Well, you think about the merits, I'm talking about the notice, were you aware when you were going into those hearings that you were about to be sanctioned or that sanctions could be imposed? We were only aware... Well, I mean the order speaks for itself, but it was the first thing I complained of in the hearing that it doesn't say what behavior we had all heard... Well, let me be ju... Let me be ju... How about the forum of the sanctions, were you aware of that? No, not at all, Your Honor. All it said is that she was displeased with the proceedings, and it really had much more to do with Moschadilus, and especially... It's a button to be required to tell you the form of sanctions under consideration. I think that that's absolutely required, and I think... Then we say that in pracer and other cases like that. Yes, and also... So the person that is... I don't want to use the term nitpicking, but the person that is pointing to conduct in proper conduct, not behalf of council, may not have performed properly or self. Is that the situation? That's correct, Your Honor. And again, just reading 901-1C1B, it says that if it's on its own initiative, the court must describe the specific conduct that appears to violate subdivision B. Which didn't happen. But that's not what I understand, Judge Van Antwerp, and to be honest. No, that's not about that. Taking a wise notice of grounds is one thing
.. How about the forum of the sanctions, were you aware of that? No, not at all, Your Honor. All it said is that she was displeased with the proceedings, and it really had much more to do with Moschadilus, and especially... It's a button to be required to tell you the form of sanctions under consideration. I think that that's absolutely required, and I think... Then we say that in pracer and other cases like that. Yes, and also... So the person that is... I don't want to use the term nitpicking, but the person that is pointing to conduct in proper conduct, not behalf of council, may not have performed properly or self. Is that the situation? That's correct, Your Honor. And again, just reading 901-1C1B, it says that if it's on its own initiative, the court must describe the specific conduct that appears to violate subdivision B. Which didn't happen. But that's not what I understand, Judge Van Antwerp, and to be honest. No, that's not about that. Taking a wise notice of grounds is one thing. Right. Notice as to the specific forms of the sanctions, materially different. Well, I agree with that, but it's still that we had no idea of what they were looking for from the Eugern firm. We did know that there were... What in happened? Who is there, I'm sorry. That what the court and more importantly, the trustee, because the trustee had never filed anything, and the trustee ended up taking the lead. I mean, when you hear the question to misgivings regarding the equity in the property, that was never an issue before. We had no notice that there was going to be a sanction because of the allegation of lack of equity in the property, which was never an issue in the case. The sanctions seem so benign to me, I think. Is it... Is it for to give in? Yes. He was not sanctioned. He was not sanctioned. Ms. Hamer was not sanctioned. But they're about as benign as can be, I thought. I know. But you see.
. Right. Notice as to the specific forms of the sanctions, materially different. Well, I agree with that, but it's still that we had no idea of what they were looking for from the Eugern firm. We did know that there were... What in happened? Who is there, I'm sorry. That what the court and more importantly, the trustee, because the trustee had never filed anything, and the trustee ended up taking the lead. I mean, when you hear the question to misgivings regarding the equity in the property, that was never an issue before. We had no notice that there was going to be a sanction because of the allegation of lack of equity in the property, which was never an issue in the case. The sanctions seem so benign to me, I think. Is it... Is it for to give in? Yes. He was not sanctioned. He was not sanctioned. Ms. Hamer was not sanctioned. But they're about as benign as can be, I thought. I know. But you see... Your complaint is not about that. It's what. Well, I have complaint. I mean, if you read my brief, you know... Not the severity of the sanction, but the imposition. Well, the severity... I mean, I point once again to the statement of any sanction against an attorney as serious in... What is it? Page 33 of the Felheimer dissonance. But let me ask you something, Mr. Barton. I mean, all along, I mean, I understand the question of form, but aren't we emphasizing form over substance when the judge said that you have been misrepresenting or facts before the court in the pleadings that have been filed before? Well, the only reason you're honored that this hearing ever got to me was the fact that a blatantly false representation had been made to the court that payments were made. They were checks attached to the answer to the motion for relief, which ended up being mailed. Those very checks, the front of the checks were on there, and they were mailed two and a half months later right before the actual here. You know what I see, though, is that you're justifying the wrongdoing of the attorneys on the basis of the wrongdoing of the debtor. But the thing is, when the allegations are made.
.. Your complaint is not about that. It's what. Well, I have complaint. I mean, if you read my brief, you know... Not the severity of the sanction, but the imposition. Well, the severity... I mean, I point once again to the statement of any sanction against an attorney as serious in... What is it? Page 33 of the Felheimer dissonance. But let me ask you something, Mr. Barton. I mean, all along, I mean, I understand the question of form, but aren't we emphasizing form over substance when the judge said that you have been misrepresenting or facts before the court in the pleadings that have been filed before? Well, the only reason you're honored that this hearing ever got to me was the fact that a blatantly false representation had been made to the court that payments were made. They were checks attached to the answer to the motion for relief, which ended up being mailed. Those very checks, the front of the checks were on there, and they were mailed two and a half months later right before the actual here. You know what I see, though, is that you're justifying the wrongdoing of the attorneys on the basis of the wrongdoing of the debtor. But the thing is, when the allegations are made... The debtor's dirty with sanction. I'm aware of that. I'm not sure that... I'm saying it's true when made, Your Honor, and what happened is it's being judged in May. The motion is filed in January. That's my point. It's filed in January. It gets continued to made because of false representations that payments were made, which were not. By the time we get to May, there are different circumstances, but you can't judge the accuracy of the pleading by the condition in May. The payments had not been made when the motion was filed, when the submission was filed, but they had been by the time the hearing was answered. They were received in the foreclosure department three days before the hearing, the same checks, which were represented to have already been mailed in January. That development doesn't change the falsity of the representation made in the original, in the initials. Except there was no... But if I disagree... By debtor's counsel. Oh, by debtor's counsel
.. The debtor's dirty with sanction. I'm aware of that. I'm not sure that... I'm saying it's true when made, Your Honor, and what happened is it's being judged in May. The motion is filed in January. That's my point. It's filed in January. It gets continued to made because of false representations that payments were made, which were not. By the time we get to May, there are different circumstances, but you can't judge the accuracy of the pleading by the condition in May. The payments had not been made when the motion was filed, when the submission was filed, but they had been by the time the hearing was answered. They were received in the foreclosure department three days before the hearing, the same checks, which were represented to have already been mailed in January. That development doesn't change the falsity of the representation made in the original, in the initials. Except there was no... But if I disagree... By debtor's counsel. Oh, by debtor's counsel. That's correct. I'm sorry. I thought you meant by Mr. Lloyd. Very good, Mr. Lloyd. Thank you very much. Mr. Sheen. Mr. Sheen, I was by no means overstating when I confessed at the outset my lack of expertise in the bankruptcy field. And that extends throughout my legal career. But what little I do know, it strikes me as rather unusual that the US trustee would be appearing in a relatively small amount matter. I'm not saying it's not important, a relatively small amount matter, chapter 13. Am I wrong about that? Well, no. I mean, certainly the sanctioned this case, as Mr. Bart pointed out, is not a huge issue to either side here. What is, though, a very important issue for us, is I think the threshold question of does the behavior that happened this case comply with roll 9-11 standards? And this is an ongoing problem in bank and bank. So are you concerned about what may have driven the bankruptcy judge here and what certainly judgeful him seemed to think animated the bankruptcy judges decision? And that is the nature of the practice, or the evolution of the practice, and the distance that has resulted from computerized relationships between client and attorney. Is that what is at least partly important to the US trustee here? Well, that is important to the United States trustee, though, and I will point out that there are several other cases pending right now in different bankruptcy courts where that issue is front and center. That is not really what is at issue in this appeal. I mean, the new track issues, the Moscow, the Moscow Dulles issues, the LPS issues. It is not quite correct to say that LPS and Moscow Dulles were a lot of off-scot free here
. That's correct. I'm sorry. I thought you meant by Mr. Lloyd. Very good, Mr. Lloyd. Thank you very much. Mr. Sheen. Mr. Sheen, I was by no means overstating when I confessed at the outset my lack of expertise in the bankruptcy field. And that extends throughout my legal career. But what little I do know, it strikes me as rather unusual that the US trustee would be appearing in a relatively small amount matter. I'm not saying it's not important, a relatively small amount matter, chapter 13. Am I wrong about that? Well, no. I mean, certainly the sanctioned this case, as Mr. Bart pointed out, is not a huge issue to either side here. What is, though, a very important issue for us, is I think the threshold question of does the behavior that happened this case comply with roll 9-11 standards? And this is an ongoing problem in bank and bank. So are you concerned about what may have driven the bankruptcy judge here and what certainly judgeful him seemed to think animated the bankruptcy judges decision? And that is the nature of the practice, or the evolution of the practice, and the distance that has resulted from computerized relationships between client and attorney. Is that what is at least partly important to the US trustee here? Well, that is important to the United States trustee, though, and I will point out that there are several other cases pending right now in different bankruptcy courts where that issue is front and center. That is not really what is at issue in this appeal. I mean, the new track issues, the Moscow, the Moscow Dulles issues, the LPS issues. It is not quite correct to say that LPS and Moscow Dulles were a lot of off-scot free here. The judge, the Sigmund simply noted that there was not enough of a factual record there to sanction them, and she essentially deferred action against Moscow Dulles and LPS to the United States trustees further investigation. I think what is notable here is that really none of the missteps in this case were actually caused by the U-turn firm relying on a new track. These were actually, you know, these are missteps to happen because they relied on nothing at all. And actually, and actually, is that the culture that the bankruptcy judge then was referring to in this sanction of Mr. U-turn? Well, the culture is what was in the June 9th order. The culture is filing things without taking the time, taking the steps to verify what your filing is correct. Including information that is derived from the new track program? That is part of it. And I actually want to point out that. I misunderstood you before you said that is not the problem. Well, the problem is a failure to investigate, but it begins, does it not, as I understand, the actual history of the case, from taking information from the screen, not investigating further to ascertain whether it's reliable or not or accurate or not? Well, there's actually two different things going on here. And this actually brings me into the response that I wanted to make about the alike of equity finding here. The two problems that they're going on are one, taking the new track materials as gospel, which, again, at face value. At face value. And that is a problem, though, again, there's no, that's not actually what happened with any of these three misstatements in this case. What did happen here was that they took the new track information and never sought to go beyond that. And I actually wanted to mention the difference. Well, here's the difference. I mean, I call your attention to page 134, the record. And this is the testimony of Ms. Graves from HSBC explaining exactly what is in the University of Information that you during whatever see through new track. And she says that, look, their new track information is going to be the loan number. Work interest name, property address payment amount, late fees, anything that would be, would be, would be due knowing at that time. What's not mentioned there is there is nothing in new track that tells them what the equity was
. The judge, the Sigmund simply noted that there was not enough of a factual record there to sanction them, and she essentially deferred action against Moscow Dulles and LPS to the United States trustees further investigation. I think what is notable here is that really none of the missteps in this case were actually caused by the U-turn firm relying on a new track. These were actually, you know, these are missteps to happen because they relied on nothing at all. And actually, and actually, is that the culture that the bankruptcy judge then was referring to in this sanction of Mr. U-turn? Well, the culture is what was in the June 9th order. The culture is filing things without taking the time, taking the steps to verify what your filing is correct. Including information that is derived from the new track program? That is part of it. And I actually want to point out that. I misunderstood you before you said that is not the problem. Well, the problem is a failure to investigate, but it begins, does it not, as I understand, the actual history of the case, from taking information from the screen, not investigating further to ascertain whether it's reliable or not or accurate or not? Well, there's actually two different things going on here. And this actually brings me into the response that I wanted to make about the alike of equity finding here. The two problems that they're going on are one, taking the new track materials as gospel, which, again, at face value. At face value. And that is a problem, though, again, there's no, that's not actually what happened with any of these three misstatements in this case. What did happen here was that they took the new track information and never sought to go beyond that. And I actually wanted to mention the difference. Well, here's the difference. I mean, I call your attention to page 134, the record. And this is the testimony of Ms. Graves from HSBC explaining exactly what is in the University of Information that you during whatever see through new track. And she says that, look, their new track information is going to be the loan number. Work interest name, property address payment amount, late fees, anything that would be, would be, would be due knowing at that time. What's not mentioned there is there is nothing in new track that tells them what the equity was. There's nothing in new track that tells them whether the debtors do or do not have equity. That was the University of Information that Ms. Doyle had when she said, well, what is an attorney to do such as, if it's given, I don't know if he's the one that got him from it. What is it attorney to do when you turn on the screen and you see this information and you have to file a pleating? Well, I think you have two choices. You can either file the pleating without the, without the allegations that you can't support. How do you support the allegations? You have to, you see what's on the screen and then you have to investigate further? Is that what you're suggesting? Well, again, I think there's an open issue on how far they have to call the bank and say is this accurate? Well, again, that's not, that's not what happened here because they weren't saying, they were not sanctioned for using any information from new track. They were sanctioned for putting in allegations that were not taken from new track. And, and for example, that is exactly what happened with the allegation regarding the lack of equity. That wasn't part of the new, of the new track information. Mr. Well, did not rely on anything at all when she put that in her pleating. Mr. Shan, one last question and I want to take you back once again to the, the imposition of the sanction on Mr. Eudron because I'm trying to understand what the position of the US attorney is. And frankly, I'm left at least with, with what is at least a notion that you're arguing something in the nature of vicarious liability here. And surely that can't be what 11 and 9,000 11 are about. How am I wrong? No, again, there's no. We're not seeking vicarious liability here and we don't take the position that that's what 9011 provides or that that is what Judge Sigmund did. Our position is simply that she enforced that part of 9011 that says the persons who cause. The violations can be sanctioned and her factual finding was that Mr. Eudron caused that violation. Okay, time is up. Mr
. There's nothing in new track that tells them whether the debtors do or do not have equity. That was the University of Information that Ms. Doyle had when she said, well, what is an attorney to do such as, if it's given, I don't know if he's the one that got him from it. What is it attorney to do when you turn on the screen and you see this information and you have to file a pleating? Well, I think you have two choices. You can either file the pleating without the, without the allegations that you can't support. How do you support the allegations? You have to, you see what's on the screen and then you have to investigate further? Is that what you're suggesting? Well, again, I think there's an open issue on how far they have to call the bank and say is this accurate? Well, again, that's not, that's not what happened here because they weren't saying, they were not sanctioned for using any information from new track. They were sanctioned for putting in allegations that were not taken from new track. And, and for example, that is exactly what happened with the allegation regarding the lack of equity. That wasn't part of the new, of the new track information. Mr. Well, did not rely on anything at all when she put that in her pleating. Mr. Shan, one last question and I want to take you back once again to the, the imposition of the sanction on Mr. Eudron because I'm trying to understand what the position of the US attorney is. And frankly, I'm left at least with, with what is at least a notion that you're arguing something in the nature of vicarious liability here. And surely that can't be what 11 and 9,000 11 are about. How am I wrong? No, again, there's no. We're not seeking vicarious liability here and we don't take the position that that's what 9011 provides or that that is what Judge Sigmund did. Our position is simply that she enforced that part of 9011 that says the persons who cause. The violations can be sanctioned and her factual finding was that Mr. Eudron caused that violation. Okay, time is up. Mr. Shan, if I could just ask one question, are you representing that this, this type of thing is a general problem in the bankruptcy court? Well, I'm not sure that that's part of the record here, though. I think it's not something I would consider in making a decision, but you said something before that there are other cases with this type of situation pending. Is that what you were saying in that? The number of cases both pending and decided and reported that involved same issues. In fact, Mr. Bart mentioned one of them, which was the kill case by Judge Egrusity out of the Western District of Pennsylvania. Could you clarify what you mean by the same issue? Well, the same issues in terms of credit attorneys for mortgage companies filing inaccurate pleadings without. Again, this is the general problem of what Judge Sigmund described as this assembly line like method for filing pleadings and bankruptcy cases. Some of these cases involve problems with LPS, some of them involve problems with other law firms and providers, but there are a number of cases involving similar issues, basically errors, improves the claim, errors in motions for relief from today. Virtual all of which are in the same way. Where are errors happen all the time? You're separating this from the computer program. I thought that the computer program was at the heart of the problems here. Well, the problem generally are these systemic errors where the errors occurred not because of like a one off human error, but the errors occur because of a policy or procedure that itself is faulty. And again, I think there are different types of faulty procedures out there. We would argue that what happened in this case may have been one of them, what has happened and these other cases, you know, are variations on the same thing. Okay, Mr. Schien. All right. Mr. Schien, thank you very much. Oh, I'm sorry. Judge V. Antwerp and any further questions? No further questions and thank you very much. Thank you, Mr
. Schien. Thank you. And thank you, Mr. Bartis, well for your excellent arguments. We'll take the case on the revisement