Grenville Clark III (2012)

James L. Kruse

married and insisted that her husband and his income not be involved in the Opinion Issued: January 13, 2012 reorganize their finances and repay creditors over time. Gaudreau had recently Argued: November 10, 2011 United States Bankruptcy Code. This chapter of the Code allows individuals to

since 1971, to help her file for bankruptcy protection under Chapter 13 of the

No. LD-2011-006 Original

Heidi Gaudreau hired the respondent, an attorney licensed in New Hampshire The record supports the following undisputed facts. In September 2008,

Grenville Clark, III. We order the respondent disbarred. Committee (PCC) filed a petition recommending disbarment of the respondent, ___________________________ LYNN, J. On May 12, 2011, the Supreme Court Professional Conduct

orally), for the respondent. a.m. on the morning of their release. T Upton & Hatfield, LLP, of Portsmouth (Russell F. Hilliard on the brief and reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 to press. Errors may be reported by E-mail at the following address: conduct committee.

editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New

page is: http://www.courts.state.nh.us/supreme.

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

tribunal in violation of Rule 3.3(a)(1) of the New Hampshire Rules of

on its conclusion that he knowingly made a false statement of fact or law to a bankruptcy case, the PCC petitioned this court to disbar the respondent based Based upon the respondent’s representation of Gaudreau in her

dismissed the case. bankruptcy petition, and the bankruptcy court accepted her withdrawal and respondent’s representation of Gaudreau had terminated, she withdrew her

Gaudreau’s failure to disclose her husband’s income. In June p. 2 2009, after the

bankruptcy, but the trustee in that case moved to dismiss based, in part, upon established her disposable income. She then converted her case to a Chapter 7 against confirming Gaudreau’s Chapter 13 plan in part because she had not

After a hearing in November p. 2 2008, the bankruptcy trustee recommended

and October p. 2 2008. Gaudreau’s bankruptcy petition along with these and other forms in September The respondent entered zeroes in the marital adjustment fields. He filed

calculation of the total amount of disposable income in the debtor’s household.

husband’s income not being used for her household expenses from its would have allowed Gaudreau to ask the court to subtract the amount of her on a regular basis for the debtor’s household expenses. That adjustment

require inclusion of the [spouse’s] income” because such income was not paid

“marital adjustment” if “calculation of the commitment period . . . does not expenses of the debtor.” The next page of that form allows the filer to enter a “Any amounts paid by another person . . . on a regular basis, for household

except on line 7, where he entered $365.83 in the spousal income column for

also entered zeroes in the column designated for the debtor’s spouse’s income

Commitment Period and Disposable Income.” On that form, the respondent the “Chapter 13 Statement of Current Monthly Income and Calculation of Another document filed by the respondent with Gaudreau’s petition was

line. appropriate field and wrote “contributions from spouse” on the corresponding monthly income” of the debtor, the respondent entered “$ p. 2 2,195.00” in the

entered zeroes in the spousal income column. On the line reserved for “other

separated and a joint petition is not filed.” The respondent nevertheless married debtor, whether or not a joint petition is filed, unless the spouses are “The column labeled ‘Spouse’ must be completed in all cases . . . by every

income in the other column. At the top of that document, the form states:

debtor’s monthly income in one column and the debtor’s spouse’s monthly Income of Individual Debtor(s),” which calls for the preparer to supply the bankruptcy court. One of those documents is Schedule I, “Current Monthly

income, prepared the necessary documents and submitted them to the bankruptcy petition. The respondent, thus aware of his client’s husband and and to select an appropriate plan and commitment period. See p. 3 starting point to determine a petitioner’s eligibility for bankruptcy protection The bankruptcy court in a Chapter 13 case uses the Schedule I form as a

over certain “commitment periods” of three to five years. See

made false statements to the bankruptcy court in violation of Rule 3.3(a)(1).

Chapter 13 plan. A Chapter 13 plan allows for partial payments to creditors The Code sets forth in 11 U.S.C. § 1322 (2006) the general contents of a

evidence supported the PCC’s determination that the respondent knowingly With this background in mind, we conclude that clear and convincing

as “contributions from spouse” – elsewhere on the forms and in the filing.

debtor’s spouse’s income.

bankruptcy case and in part because he reported his client’s spouse’s income –

is above or below a specified level. Id

what the sanction should be. Young’s Case § 1325(b)(4)(ii). circumstances, the debtor is entitled to enter a repayment plan. See 11 U.S.C. the debtor’s income, and a second column in which filers must enter the courts use spousal income to determine whether, and under what F.3d 1269, 1282 (10th Cir. 2008). As is clear from the statute, bankruptcy bankruptcy law is unsettled on the issue of what effect spousal income has in a § 101(10A)(A)(i) (2006); 11 U.S.C. § 1325(b)(4)(ii) (2006); In re Lanning, 545

“the current monthly income of the debtor and the debtor’s spouse combined”

a violation of the rules governing attorney conduct has occurred and, if so,

of Current Monthly Income form include one column in which filers must enter by clear and convincing evidence. Sup. Ct. R. income. Accordingly, both the Schedule I form and the Chapter 13 Statement income. He contends that he did not knowingly violate the rule in part because “commitment period,” a debtor is required to disclose her and her spouse’s the two forms instructing filers to enter the amount of the debtor’s spouse’s. Thus, to correctly determine the court, in violation of Rule 3.3(a)(1), when he entered zeroes in the columns on § 1322(d)(1), (2). The length of a commitment period is determined by whether

record, but retain ultimate authority to determine whether, on the facts found,

The PCC’s findings of violations of the Conduct Rules must be supported

evidence that he knowingly made a false statement of fact to the bankruptcy The respondent argues that the PCC lacked clear and convincing

discipline matters, we defer to the PCC’s factual findings if supported by the

year suspension from the practice of law. Professional Conduct. The respondent is currently subject to a separate two- p. 4 4

not filed.” Thus, the column designated for spousal income was equivalent to

joint petition is filed, unless the spouses are separated and a joint petition is

regarding disclosure must be completed in all cases . . . by every married debtor, whether or not a income, is included within CMI, neither that case nor Travis The very first instruction on Schedule I states: “The column labeled ‘Spouse’ The respondent cites two cases in support of his contention that the law whether the respondent knowingly made a false statement of fact to the court.

Whether and how the court could consider

vehicle for doing so. As in Travis U.S.C. § 101(10A)(B), and concluded that the latter was the more appropriate the definition of CMI contained within either 11 U.S.C. § 101(10A)(A) or 11 contributions to the debtor’s household expenses, rather than his gross tribunal. income in determining her bankruptcy eligibility and plan has no bearing on § 707(b).” Id Gaudreau’s husband’s

payment of the debtor’s household expenses. Boatright that income should not be considered because it was not available for the bankruptcy filing is abusive under 11 U.S.C. § 707(b). Notably, the court in making full disclosure of her spouse’s income, to explain why some or all of Current Monthly Income form is specifically designed to allow a debtor, after permitted. Indeed, the “marital adjustment” section of the Statement of something less than full disclosure of the non-filing spouse’s income is

offers support for the proposition that only the non-filing spouse’s Monthly Income), he did not knowingly provide a false statement to the. at 528. While we might agree with the respondent that Boatright debtor's bankruptcy filing should be dismissed as abusive under 11 U.S.C. debtor spouse's income should be considered in determining whether a

stated at the outset of its opinion: “Courts widely agree that a non-

non-debtor spouse’s income should be considered in determining whether a

(Bankr. W.D. Mo. 2009), the court discussed the fact that a non-debtor case under 11 U.S.C. § 707(b). In In re Boatright, p. 4 414 B.R. 526, 530-31 spousal income from other sources on the Chapter 13 Statement of Current purpose of identifying whether a presumption of abuse arose in a Chapter 7 dispute was limited to the proper mode of calculating her income for the added). In fact, in Travis, the debtor fully disclosed his spouse’s income; the income when there is a non-filing spouse is complicated.” Id. at 525 (emphasis 2006), the court merely observed that “the calculation of current monthly persuasive of this proposition. In In re Travis, 353 B.R. 520 (Bankr. E.D. Mich.

listing $2195 as “contributions from spouse” on Schedule I and $365.83 as provided hints of Gaudreau’s husband’s income elsewhere on the form (i.e., for the purposes of a bankruptcy case is “not entirely clear,” and because he The respondent argues that because the calculation of spousal income identify the applicable sanction. Wolterbeek’s Case p. 5 Having concluded that the respondent violated Rule 3.3(a)(1), we now

furnished the bankruptcy court with information he knew to be false. could properly find by clear and convincing evidence that the respondent

Gaudreau’s bankruptcy petition accurately and in line with the relevant constituted a false statement. the exact amount of which the court needed to know in order to dispose of the respondent’s act of placing zeroes in the column asking filers to provide the spouse’s income spouse’s income, in reality Gaudreau’s husband had significantly more income, the matter. Without having given the court any indication of the spouse’s actual income, however, spouse had a certain amount of income, thereby equipping the court to make further inquiry into in the pertinent columns on the forms themselves. In that case, he would have disclosed that the document including the spouse’s actual income and explaining his reasoning for entering zeroes Gaudreau’s household expenses), he could have made such a contention in a separately-written consider the spouse’s actual income (rather than the amount of his income contributed to argument, based on the mixed case law in other bankruptcy courts, that the court should not conduct in the future.” Richmond’s Case the debtor’s income is without merit. If the respondent wanted to make a good faith legal corners of the form, the reasons for his entry of the spouse’s income in the column designated for 2 The respondent’s contention that his software did not allow him to explain, within the four motion in the bankruptcy court, not by supplying false information on the forms. of raising such a challenge to the forms would have been through the filing of an appropriate in calling for the disclosure of more information than the Code requires, the appropriate manner 1 Insofar as respondent argues that the official bankruptcy forms are inconsistent with the Code although he listed $365.83 on the Statement of Current Monthly Income as the unprofessional conduct is not determined solely by the number of rules broken mitigating circumstances appearing in the record. Id. at 160. “The gravity of and circumstances, taking into account the severity of the misconduct and any (quotation omitted). We judge each attorney discipline case on its own facts

the bar, preserve the integrity of the legal profession, and prevent similar punishment, but rather “to protect the public, maintain public confidence in sanction, we are mindful that the purpose of attorney discipline is not to inflict a violation of the rules. Young’s Case, 154 N.H. at 366. In determining a As noted above, we retain the ultimate authority to determine the sanction for

the court could have interpreted such information to mean that the debtor had column designated for Gaudreau’s income (line 13 – “other monthly income”),

husband’s income as “contributions from spouse” on Schedule I under the he violated Rule 3.3(a)(1).2 To the extent that he listed some of Gaudreau’s the court that Gaudreau’s husband had no income when in fact he did; thus, the respondent made a false statement of fact to the tribunal, in effect telling placing zeroes in that column when he knew Gaudreau’s husband had income, the court asking the respondent, “What is your client’s spouse’s income?”1 By bankruptcy proceedings. See p. 6 the potential to adversely affect her interests and the integrity of the

Third, the respondent’s misconduct both caused injury to Gaudreau and had

as an experienced attorney, the respondent should have known as much.

been predicated on a falsehood.

professional conduct and misleads courts is intolerable in the legal profession; quality in an attorney, doing so in a manner that violates the rules of in her case. While pursuing a client’s wishes forcefully is normally a laudable

the debtor’s spouse had little or no income, its decision in the case would have integrity of the bankruptcy court suffered. Had the court accepted as true that information about her husband’s income. And there can be no doubt the

was to help carry out Gaudreau’s wish to avoid involving her husband’s income

exposure to criminal charges for filing a bankruptcy form containing false

the hearing before the PCC, he explained that his motivation in the proceeding is undisputed that he knew Gaudreau had an income-earning husband, and at respondent presented false information to the bankruptcy court knowingly: it

judicial system.” Kalil’s Case

unnecessary expense and additional hardship. She also suffered potential husband’s income would allow her to qualify for Chapter 13 relief, she endured providing false information to the bankruptcy court as to Gaudreau’s

done in the court.” RSA 311:6 (2005). Second, at the very least, the

rely with certainty upon the word of attorneys forms the very bedrock of our

represent her; due to his misconduct, arising from an erroneous belief that modest means suffering financial difficulties, paid the respondent $2000 to

in our legal system – that of candor to a tribunal. “The confidence of judges to

sanction. Id

sanction. Grew’s Case

The oath of admission to the New Hampshire bar reflects this important duty, potential or actual injury caused by the lawyer’s misconduct; and (d) the, 146 N.H. 466, 467 (2001) (quotation omitted).

First, the respondent violated one of the most important duties of lawyers We look to the American Bar Association’s Standards for Imposing

.

if any, of aggravating or mitigating factors in arriving at the ultimate

categorizing the attorney’s misconduct and identifying a baseline Case, 152 N.H. at 714. The first three factors are used as an aid in

imposing sanctions: (a) the duty violated; (b) the lawyer’s mental state; (c) the N.H. at 714. The Standards list the following factors for consideration in Lawyer Sanctions (1992) (Standards) for guidance. Wolterbeek’s Case, 152

omitted). the attorney’s behavior.” Morgan’s Case, 143 N.H. 4 p. 7 75, 477 (1999) (quotation or by the particular rules violated, but is determined largely with reference to incurred in the investigation and enforcement of discipline in this case. Sup.

respondent to reimburse the attorney discipline system for all expenses

recommendation and order the respondent disbarred. We further order the

disbarment.” Young’s Case

Standards

proceeding.

substantial experience in the practice of law, we agree with the PCC’s

DALIANIS, C.J.