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In re Leventhal – 11-A-1467 (ND IL ED, 2012)

On its face this case is an adversary where the Debtor is moving to disqualify the Plaintiff’s attorney because the Plaintiff’s attorney may be called as a witness in the case. The court cites the “Advocate Witness” rule which comes from the Model Rules of Professional Responsibility 3.7. There are 2 elements to the analysis to determine whether to disqualify an attorney-witness. The first is to determine the likelihood of the attorney being a necessary witness. The second is if the attorney is a necessary witness would the disqualification be a substantial hardship on the client.

The analysis of the first prong – the likelihood of the attorney acting as a witness, is where the case was interesting. The Plaintiff filed the adversary on the basis that he did not receive notice of the Debtor’s bankruptcy until after the discharge so he was unable to charge the dischargeability of the debt owed to him under 523(a). The Debtor had only listed the Plaintiff’s name and city on the bankruptcy petition, so notice was not mailed to him.

The Debtor attempted to impute knowledge to the Plaintiff based on two theories: (1) the creditors meeting was continued five times and this information was publically available on the bankruptcy docket (presumably CM/ECF). The court noted that all creditors are not routinely given notice of all events on the bankruptcy docket and that the Bankruptcy Noticing Center (BNC) does not send out notice of continued creditor meetings. In fact if the BNC does send out notice, there will be a separate docket entry for the BNC certificate of service. Since there was no record of notice sent out, simply being listed on the docket was not enough to impute knowledge of the bankruptcy to the plaintiff.

The second theory was given more weight by the court (although the issue was not decided by the court, this opinion was just a ruling on the motion to disqualify counsel). This theory was that the Debtor had emailed Plaintiff’s attorney 2 weeks post-petition that had filed a personal bk. There is a presumption that a properly addressed item mailed to someone was received by that person. Laouini v. CLM Freight, 586 F.3d 473, 476-7 (7th Cir. 2009). That presumption has been extended to include email. American Boat v. Unknown Sunken Barge, 418 F.3d 910, 914 (8th Cir. 2005). Therefore if the Debtor were to testify that he emailed the Plaintiff’s attorney, there would be a presumption that the Plaintiff’s attorney received it. That knowledge can then be imputed to the Plaintiff. Based on this logic, the court concluded that the Plaintiff attorney would likely be a necessary witness.

This is the interesting part of the case – is a docket entry in CM/ECF sufficient for notice and is an email to a creditor’s attorney sufficient for notice of the bankruptcy? From this case, clearly a docket entry alone in not sufficient; however, if there is a corresponding BNC certificate of service entry it could be. And while the court did not rule of the sufficiency of email notice from the debtor to a creditor, the court did cite enough case law to indicate that it could be.

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