“Snarky and unprofessional” emails written by a debtor’s counsel to a chapter 13 trustee are not grounds for sanctions under Rule 9011 because they were not contained in pleadings presented to the court, according to Bankruptcy Judge Jim D. Pappas of Boise, Idaho.
The March 20 opinion by Judge Pappas is a story about a lawyer behaving badly. Although the facts suggest that the debtor’s lawyer was acting unprofessionally, the facts had “little impact” on the opinion, the judge said.
Evidently, there was “considerable friction existing” between the debtor’s counsel and the chapter 13 trustee. Emails sent by the lawyer to the trustee were “at best, a poor attempt at humor, and at worst, snarky and unprofessional.” In addition, an email by the lawyer incorrectly said that the debtor had confirmed a 100% plan.
Judge Pappas said that the debtor’s lawyer also made “an unnecessary complaint to the Assistant U.S. Trustee, even speculating” that the trustee “may have done something inappropriate with” estate funds.
Asking Judge Pappas to sanction the debtor’s counsel, the trustee filed a motion under Rule 9011 seeking recovery of her attorneys’ fees incurred “as a result of false statements and accusations made” by the lawyer.
Judge Pappas denied the sanctions motion on two grounds. First, the trustee failed to comply with the safe harbor provision in Rule 9011 requiring the trustee to give the debtor’s counsel 21 days to correct the allegedly sanctionable conduct.
Even were there compliance with procedural requirements, Judge Pappas said there was “no authority to sanction counsel” because she was targeting “emails sent between [the trustee] and [debtor’s counsel] as the basis for the alleged Rule 9011 violation.”
Judge Pappas said that “a fair reading of the text” of Rule 9011 “shows that it was not intended to police lawyer email communications.” A violation of the rule, he said, “must be based upon ‘a petition, pleading, written motion or other paper’ [that was] ‘present[ed] to the court.’”
As a second ground for denying the motion, the judge said that email messages “were not ‘presented to the Court’ and indeed the Court would have been unaware of them save for their inclusion in the Trustee’s motion.”
Judge Pappas went on to cite authority for the proposition that “offensive oral statements” or misstatements made in the courtroom during oral argument are not sanctionable under Rule 11.
“If oral statements made to the Court are not sanctionable under Rule 9011, then certainly sharp barbs exchanged privately via email between lawyers fall outside of the reach of the Rule,” Judge Pappas held.
Although he declined to impose sanctions, Judge Pappas reminded counsel of local rules requiring lawyers to “act professionally and civilly in their dealings with one another.”