Thursday, May 23, 2002
C.A. Sanctions Lawyer for Not Notifying It of Client’s Bankruptcy Filing
By a MetNews Staff Writer
A San Francisco lawyer was sanctioned by the First District Court of Appeal yesterday for not informing it his client had filed for bankruptcy protection.
The court has inherent authority to impose monetary sanctions when an attorney files a frivolous appeal or violates its rules, Justice Paul Haerle wrote for Div. Two. Daniel Ray Bacon did both, the justice said.
The court ordered Bacon to pay $3,700 to counsel for Mary C. Keitel, who successfully defended an appeal by Bacon’s clients, George and Peggy Heubel. The Heubels were ordered to pay $3,700 to Keitel’s lawyer and $6,000 to the court.
Keitel is George Heubel’s sister. The appeal was from an order directing the sheriff of Alameda County to levy on properties the Heubels had transferred to a revocable inter vivos trust after the Court of Appeal, in an unpublished 1999 opinion, affirmed a $361,000 judgment for Keitel against the Heubels.
The judgment stemmed from a suit in which Keitel claimed the Heubels had used fraud and undue influence to convince her mother to transfer the majority of her assets to the Heubels prior to the elderly woman’s death.
The Heubels filed for bankruptcy protection in December of last year, after filing their opening brief. The Court of Appeal, Haerle said, had no knowledge of the bankruptcy filing until Keitel’s attorney mentioned it in a letter to the court in February.
After concluding that the bankruptcy stay does not preclude imposition of sanctions on the Huebels, Haerle said the appeal was “without merit” because revocable trusts are subject to claims of creditors of the settlor. The argument that the trustees became the property owners because they resigned, the justice said, was “ridiculous.”
As for Bacon, the justices rejected his contention that because he was not involved in the bankruptcy and had not seen or been served with the papers, he was not chargeable with knowledge of it and not required to comply with Local Rule 11 requiring that the court be notified of it.
Bacon became aware of the bankruptcy in conversation with opposing counsel and should have promptly notified the Court of Appeal when that occurred, the justice said.
The case is Keitel v. Heubel, 02 S.O.S. 2446.
Copyright 2002, Metropolitan News Company