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UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA
------------------------------------------------------ x
In re: :
:
: Case No. 07-11862
RON WILSON :
LaRHONDA WILSON, :
: Chapter 13
:
Debtors. :
------------------------------------------------------x

STIPULATION AND ORDER

R. Michael Bolen, the United States Trustee for Region 5 (“United States Trustee”) and

The Boles Law Firm APC, (“Boles”), hereby enter into a consensual resolution resolving the

United States Trustee’s inquiry and litigation against Boles in this case. The parties have agreed

to the terms of the instant stipulation and order (the “Stipulation”), establishing protocol for

procedures to be employed by Boles prior to filing motions seeking relief from the automatic

stay, proofs of claims, and other papers (collectively referred to as a “Pleading” or “Pleadings”)

filed in bankruptcy courts including the United States Bankruptcy Court for the Eastern District

of Louisiana. The United States Trustee and Boles consent and agree as follows:

CONCLUSION OF LAW AND FINDINGS OF FACT

1. The Court has subject matter jurisdiction over this matter, pursuant to 28 U.S.C. §

1334(b). This is a core proceeding under 28 U.S.C. § 157(b)(2).

2. Venue in the United States Bankruptcy Court for the Eastern District of Louisiana is

proper.

3. The Court is empowered to approve and enforce the terms of this Stipulation, pursuant

to 11 U.S.C. § 105(a) and under its inherent authority.

4. On September 29, 2007, Ron Wilson, Sr. and La Rhonda Wilson (“Debtors”) filed a

voluntary petition for relief under Chapter 13 of the Bankruptcy Code (ECF No. 1).
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5. On December 10, 2007, Clay Wirtz, Esq. of Boles, on behalf of its client, Option One

Mortgage Corporation (“Option One”), filed a proof of claim, assigned claim number ten in the

court’s proof of claim register (the “POC”). The POC asserted arrearage amounts totaling

$5,306.12. The arrearage portion of the claim included a $392.00 portion for attorney’s

foreclosure costs and fees.

6. The $392.00 for attorney’s foreclosure costs and fees were accrued post-petition, not

pre-petition.

7. On December 21, 2007, the Court confirmed the Debtors’ Chapter 13 plan (ECF No.

13) (the “Confirmation Order”).

8. On March 10, 2008 Option One filed a motion seeking relief from the automatic stay

asserting that relief was appropriate because the Debtors were four months delinquent in their

mortgage payments. (ECF No. 20). Attached to the motion for relief was an Affidavit of Debt

signed by Dory Goebel. Id. The Debtors filed a response to Option One’s motion for relief from

the automatic stay asserting that Debtors had made all payments and were current with their

mortgage. (ECF No. 24).

9. On May 9, 2008, the Court issued an Order to Show Cause (ECF No. 30), requiring

Clay Wirtz, Dory Goebel, and a representative of Option One to appear at the hearing to show

cause to explain the amounts due on the Debtors’ mortgage loan. The hearing on the motion to

show cause was set for June 26, 2008. Id.

10. At the hearing held on June 26, 2008, the Court denied the motion for relief from

stay, declared the Debtors’ loan current post-petition, through June 30, 2008, and continued the

hearing on the order to show cause. (See ECF No. 36).

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11. At the June 26, 2008 hearing, the Court also issued sanctions against Dory Goebel

and Option One for failure to appear, and for filing a false affidavit. The Court further issued

sanctions against D. Clay Wirtz for failing to amend and update the Pleadings and default

affidavit. Finally, the Court awarded attorney’s fees to be paid to the Debtors’ attorney.

12. D. Clay Wirtz, Esq., an attorney then employed by Boles, represented Option at the

June 26, 2008 hearing. Wirtz acknowledged to the Court that Boles was in possession of funds

initially paid by the Debtors to Option. Those funds totaled $8,646.37. Wirtz indicated to the

Court that Option had forwarded the Debtors’ payments to Boles. Wirtz’s statements and

conduct, however, left the impression that no attorney or employee of Boles knew why Option

had forwarded the Debtors’ payments to Boles.

13. In fact, as to each of the Debtors’ payments that were in Boles’ possession, Boles

paralegal Terrie Jones had previously instructed Option to forward each of those payments to

Boles as opposed to posting those payments to the Debtors’ account.

14. Wirtz’s statements and conduct at the June 26, 2008 hearing, with respect to why

Boles possessed the Debtors’ payments, failed to meet the standard for the duty of candor owed

to a tribunal under Louisiana Rule of Professional Conduct 3.3.

15. Wirtz’s statements and conduct at the June 26, 2008 hearing are imputable to Boles.

16. Shortly after the August 21, 2008 hearing, Boles terminated Wirtz’s employment.

Jones’ employment with Boles ended prior to the June 26, 2008 hearing. No bankruptcy

department employee with responsibilities for the March 10, 2008 Motion for Relief remains

employed by Boles.

17. In its Response to the Motion for Sanctions, Boles recited that, on its own accord,

Boles put into place the following measures:

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• Boles instructs all clients to send to Boles all funds received from a debtor after a motion

for relief is filed for holding in Boles’ file pending the outcome of the motion for relief;

• Boles’ motions for relief now contain a paragraph that discloses all payments received by

its client or Boles, regardless of whether the payment has been posted or not; and

• If Boles or its client receives a payment (whether posted or not) after the filing of a

motion for relief, Boles files an exhibit that discloses to the Court the receipt of such

payment and a photocopy of the payment.

STIPULATIONS AS TO PROTOCOL AND REMEDIES IN THIS CASE

IT IS stipulated and agreed by and between the United States Trustee and Boles

as follows:

1. Boles waives all rights to seek judicial review or otherwise challenge or contest the

validity of this Stipulation and waives any right that may arise under the Equal Access to Justice

Act, 28 U.S.C. § 2412 in connection with the proceedings and issues arising out of or related to

the United States Trustee’s motion for sanctions and the conduct addressed herein.

2. The Court shall retain exclusive jurisdiction to enforce the terms of this Stipulation, as

well as to hear and adjudicate any motions for its enforcement or contempt related thereto.

3. This Stipulation will be binding on Boles, its successors, officers, agents, employees,

shareholders, partners and others to the extent provided in Fed. R. Civ. P. 65(d) and Fed. R.

Bankr. P. 7065, and Boles shall comply with its terms in all courts in which Boles appears.

Boles stipulates that its bankruptcy practice is limited to the judicial districts in Louisiana, and it

does not represent clients in the judicial districts encompassed by any other state.

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4. Boles shall comply in all respects with the Federal Rules of Bankruptcy Procedure,

including but not limited to, Fed. R. Bankr. P. 3001 and 4001, as well as the Local Bankruptcy

Rules of all jurisdictions in which Boles appears, with respect to any Pleading that it files.

5. Before filing a Pleading in which reference is made to an amount owed by a

bankruptcy debtor, Boles will obtain and review a certification from Boles’ client. The

certification from Boles’s client shall include information regarding the following:

(A) the alleged pre-petition indebtedness, including:

(I) the amount of the total outstanding debt, itemizing the unpaid principal

balance, interest incurred or accrued through the petition date, and all fees,

charges and advances billed to or assessed against the debtor;

(ii) an itemization of all arrearage amounts;

(iii) an itemization listing each overdue monthly payment up to the petition date;

(iv) the amount held in escrow (taxes and insurance) as of the petition date;

(v) the amount of any escrow deficiency or shortage as of the petition date;

(vi) the amount paid, and coverage amount obtained, and effective dates for any

force-placed insurance purchased by Boles’s client;

(vii) the amount of and basis for pre-petition attorneys’ fees billed to or assessed

against the debtor;

(viii) the amount of pre-petition late fees billed to or assessed against the debtor;

(ix) an itemization of any miscellaneous fees or charges, including a description

of and the amount billed to or assessed against the debtor, and the date of each fee

or charge; and

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(x) the validity, perfection, and factual and legal underpinnings of any alleged

secured claim being asserted.

(B) all post-petition indebtedness, including:

(I) the amount of the total outstanding debt, itemizing the unpaid principal

balance, interest incurred or accrued, and all fees, charges and advances billed to

or assessed against the debtor;

(ii) itemization of all post-petition arrearage amounts;

(iii) an itemization listing each post-petition overdue monthly payment;

(iv) the amount held in escrow (taxes and insurance);

(v) the amount of any escrow deficiency or shortage as of the petition date;

(vi) the amount paid, and coverage amount obtained, and effective dates for any

force-placed insurance purchased by Boles’s client;

(vii) the amount of and basis for attorneys’ fees billed to or assessed against the

debtor;

(viii) the amount of late fees billed to or assessed against the debtor;

(ix) an itemization of any miscellaneous fees or charges, including a description

of and the amount billed to or assessed against the debtor, and the date of each fee

or charge; and

(x) the validity perfection, and factual and legal underpinnings of any claim

alleged to be secured.

6. Boles will not file a Pleading unless:

(A) the allegations and contentions therein have legal and evidentiary support;

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(B) Boles has obtained and reviewed a certification from the client in

compliance with paragraph 5;

(C) Boles has (i) reviewed a master payment and loan history to substantiate

any allegations as to missed payments; (ii) verified the propriety and

accuracy of the charges asserted, amounts sought, and the priority or

priorities asserted; and (iii) verified any allegations concerning the client’s

standing, the delinquency of the account, and the lack of equity in the

property that is the subject of the Pleading.

(D) Boles verifies with the client and states in any Pleading (i) the last date of

payment by a debtor, including when the payment was received and the

date it was posted, and (ii) whether a debtor has attempted to make any

payment to the client which the client has rejected, returned, held but not

posted, or held in suspense, and the amounts of those payments.

7. Prior to attending any Court hearing on a Pleading it filed in which a reference is

made to the specific amount due and owing by the debtor to any client of Boles, Boles will make

reasonable inquiry with its client to ensure all allegations in the motion are still true and that

their has been no change in the debtor’s payment history. Boles will make such inquiry with its

client regardless of whether a response has been filed. Any counsel appearing on behalf of Boles

(whether or not directly employed by Boles or another firm as “stand in” counsel) shall be

knowledgeable about the facts of the Pleading pending before the Court and shall have specific

knowledge regarding Boles’ communications with its client and the reasonable inquiries required

by this stipulation and will be prepared to communicate such information to the Court. With

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respect to any motion for relief from stay, such inquiry shall be made during the two business

days preceding the hearing on such motion, including continued hearings.

8. Boles will designate an attorney with supervisory authority and expertise in

bankruptcy law (called the “Designated Attorney”) to review all Pleadings before they are filed

with the bankruptcy court. The Designated Attorney shall ensure that Boles has complied with

Paragraphs 5 and 6 of the Stipulation and all other obligations under the Bankruptcy Code,

Federal Rules of Bankruptcy Procedure, and/or local bankruptcy rules, forms, procedures and

practices, or under any other bankruptcy court order. Boles will continue to retain Designated

Attorney to perform the services described in this paragraph for two (2) years from the date of

entry of this Stipulation and Order, subject to further Order of the Court. Boles shall advise the

United States Trustee should the Designated Attorney be replaced with a different attorney(s).

9. Boles designates Jacob Edwards as the attorney with expertise in bankruptcy law

(the “Designated Attorney”) to review all Pleadings as contemplated in paragraph 9 herein.

10. All motions for relief from stay filed by Boles shall include a verified statement

executed by the Designated Attorney attesting to the review as specified in Paragraphs 5 and 6

of this Stipulation and any other items applicable to the particular case, and a copy of the verified

statement shall be attached as an exhibit to any motion for relief from stay that is filed by Boles.

Boles shall serve the United States Trustee at USTPRegion05.NR.ECF@usdoj.gov with every

motion for relief from stay filed during the term of the Stipulation.

11. All proofs of claim filed by Boles shall include a verified statement executed by the

Designated Attorney attesting to the review performed as specified in Paragraphs 5 and 6 of

this Stipulation and any other items applicable to the particular case, and a copy of the verified

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statement shall be attached as an exhibit to any proof of claim that is filed by Boles. Boles shall

serve the United States Trustee at USTPRegion05.NR.ECF@usdoj.gov with every proof of

claim filed during the term of the Stipulation.

12. After a Pleading is filed in which a reference is made to the specific amount due and

owing by the debtor to any client of Boles, within a reasonable time of Boles receiving a

payment from either a debtor directly or from its client; being notified of receipt of a payment by

a debtor from its client; or receiving an updated payment history with payment information not

contained in the initial Pleading, Boles will promptly file a supplement to the Pleading with the

Court apprising the Court of the updated payment and information.

13. With respect to any Pleading filed in bankruptcy court, Boles shall retain, for two

years, a copy of all communications with its client; and the name, title, and contact information

of the client representative with whom Boles may communicate about the Pleading.

14. If a debtor or other party contests (whether by motion, response, adversary

complaint, or other document including private letter, regardless of whether such dispute is filed

in court or sent directly to Boles or its client) the accuracy of the Pleading filed by Boles on

behalf of a client, Boles will notify the United States Trustee within two (2) business days of

becoming aware of such dispute. Boles will timely and reasonably investigate with its client the

contested claims and provide accurate information to the Court with respect to the same.

15. Boles will report to the Louisiana Bar concerning the conduct of Wirtz. Boles

makes no admission of wrongdoing as to any other matters before this or any other Court.

16. Boles will seek authorization to amend the POC to delete the inappropriate fees and

costs associated with the post-petition foreclosure task in In re Wilson. If Boles is unable to

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obtain authorization, it will notify the Debtor, the Chapter 13 Trustee and the Unites States

Trustee promptly so that appropriate relief may be sought from the Court.

17. Boles will verify that no fees or costs have been imposed on the Wilson mortgage

account with respect to any motion for relief or foreclosure tasks that Boles was retained to

perform. Boles will provide such verification, or its inability to provide such verification, in

writing served upon the Debtors, the Chapter 13 Trustee, and the United States Trustee within 30

days of the filing of this Stipulation.

18. Boles will disgorge to the Debtors any attorney’s fees it received in this case.

19. Boles will cooperate generally in the United States Trustee’s continuing

investigation and prosecution of the May 21, 2010 motion for sanctions. This includes but is not

limited to cooperation in scheduling depositions of Boles employees; and answering, to the

extent it can do so without violating a specific applicable privilege, all questions from the United

States Trustee, including information with respect to Boles’ relationship with Lender Processing

Services, Inc., f/k/a Fidelity National Information Services, Inc.

20. Boles will ensure that it has a fully executed specific client agreement with each

servicer or bank it represents in any bankruptcy court. Boles will produce a copy of its client

agreement if ordered to by the bankruptcy court, subject to the assertion of any privilege. Boles

will at all times ensure that it is in compliance with the Louisiana Rules of Professional Conduct

regarding proper fee agreements with its clients.

21. Boles will ensure that, consistent with generally understood rules on ECF, motions

for relief or other Pleading with be personally signed by an attorney admitted to practice in the

jurisdiction in which the document is filed, and will retain a signature copy of the Pleading or

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claim in accordance with Local Rules as long as the case remains open and for a reasonable

period of time thereafter and/or 1 year, whichever is greater.

22. In all bankruptcy cases, Boles will forward all non-frivolous inquires for additional

information or documents from case trustees, debtors, and the U.S. Trustee to their clients within

a reasonable time after their receipt, and will respond to the requesting party, in writing, in a

timely manner. If Boles is unable to obtain the information or document within a reasonable

amount of time, or claims such documents are privileged, Boles will provide written notification

to the requesting party as to the reason for the delay or the specific claim of privilege as to why

the documents are being withheld.

23. All Boles attorneys appearing in bankruptcy court will attend a minimum of three

additional hours of continuing legal education on ethics issues during 2010, above what is

required by State licensure mandate, through an approved CLE provider. Such CLE will be

funded by Boles. At least one hour will be in person and at least one hour should address

attorney-client ethical relations. Certification of the courses attended shall be provided to the

United States Trustee by December 31, 2010.

24. The United States Trustee seeks no further monetary or non-monetary sanctions

against Boles in this case.

25. For the purposes of this Stipulation, Boles shall, unless otherwise directed by the

United States Trustee, mail all written notifications to the United States Trustee for the Region

covering the appropriate judicial district, as well as a copy by e-mail if requested by the

particular United States Trustee. For cases filed in the Eastern District of Louisiana, such e-mail

notifications shall be sent to: USTPRegion05.NR.ECF@usdoj.gov

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26. In any e-mail to the United States Trustee required by, or in relation to, the

Stipulation, Boles shall prominently include in the subject line the following:

COMMUNICATION IN CONNECTION WITH STIPULATION AND ORDER.

27. Boles agrees to comply with the terms of this Stipulation in all cases in all

bankruptcy courts in which Boles appears, regardless of state or judicial district.

Notwithstanding any other provision of the Stipulation, the United States Trustee and/or any

party-in-interest may call the terms of the Stipulation to the court’s attention in any pending case

in any bankruptcy court in which Boles appears, regardless of state or judicial district.

28. Nothing in the Stipulation will prejudice, limit, or impact any right, claim, or cause

of action of the United States Trustees and Acting United States Trustees for Regions 1 through

21 against Boles other than those claims that arise from the conduct described herein in

connection with the United States Trustee’s motion for sanctions.

29. Nothing in this Stipulation limits or impacts any right, claim, or cause of action of

the United States Trustee against any person not a party to the Stipulation, including, but not

limited to, servicers, investors of the mortgage pools, subservicers and/or default servicers.

Nothing in this Stipulation shall limit Boles’ rights or claims against or in defense of any action

brought by any other person or entity, whether a party to this Stipulation or not.

30. In the event that Boles remains in compliance with the terms and conditions of the

Stipulation for a period of two (2) years from the date of its entry, the rights and obligations of

the parties under the Stipulation shall terminate. Nevertheless, the term of the Stipulation may

be extended upon further order of the Court for good cause shown.

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31. This Stipulation is not intended to alter, limit or impact Boles’s existing or future

obligations under the Bankruptcy Code, Federal Rules of Bankruptcy Procedure, and/or local

bankruptcy rules, forms, procedures and practices, or under any other bankruptcy court order.

32. This Stipulation is not intended to supersede or replace any additional action or

remedy that the Court may choose to impose in connection with this or any other case.

33. Nothing in the Stipulation shall bind any non-party or prejudice the rights and claims

of any non-party arising out of or related to the business of Boles.

PENALTY FOR VIOLATION OF THIS STIPULATED JUDGMENT

34. In the event that the United States Trustee alleges that Boles has violated the terms of

the Stipulation or is otherwise not in compliance with the terms of the Stipulation, the United

States Trustee, in its discretion, may undertake any appropriate enforcement actions or otherwise

seek relief against Boles in:

(A) the United States Bankruptcy Court for the Eastern District of Louisiana, including

filing a motion for the entry of an order of contempt and any remedy or sanction available under

applicable law; and/or

(B) the court that has jurisdiction over the bankruptcy case(s) in which the violation

occurred.

New Orleans, Louisiana, October 27, 2010.

Hon. Elizabeth W. Magner


U.S. Bankruptcy Judge

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Dated: New Orleans, LA

September 14, 2010


R. MICHAEL BOLEN
UNITED STATES TRUSTEE

By: s/ Mary Langston


Mary Langston, Esq. (22818)
Assistant United States Trustee
400 Poydras Street, Suite 2110
New Orleans, Louisiana 70130
(504) 589-4018

Dated: New Orleans, LA

September 14, 2010

s/ Jacob S. Edwards
Jacob S. Edwards, Esq. (30492)
The Boles Law Firm, APC
1818 Avenue of America
Monroe, Louisiana 71201
(318) 388-4050

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