In Re The Disciplinary Proceeding of Michael A Younge, 2:19-cv-06073

Background

Michael A. Younge, a California lawyer, employed his wife Amany Simmonds as a legal assistant; Simmonds had little prior substantive legal experience.
Younge represented long-time client Surat Singh in bankruptcy; Singh executed a quitclaim deed (July 20, 2018) transferring a highly underwater Newport Beach property to Simmonds, which delayed Bayview’s scheduled foreclosure.
Younge filed an opposition and a declaration on Simmonds’s behalf in bankruptcy court opposing Bayview’s motion for relief from the automatic stay; those filings repeated arguments previously rejected by state and federal courts.
Bankruptcy Judge Bauer found the transfer intended to frustrate foreclosure, concluded Younge failed to conduct a reasonable inquiry and violated FRBP 9011 and CRPC 3-110(A), and referred Younge to the bankruptcy disciplinary panel.
The bankruptcy disciplinary panel reviewed the matter de novo, concluded Younge was involved in and knew of the transfer, adopted most of Judge Bauer’s findings, and suspended Younge from practice before the bankruptcy court for a minimum of five years.
The district court on appeal: affirmed the panel’s finding that Younge violated FRBP 9011 and the five-year suspension; reversed the panel’s finding that he violated CRPC 3-110(A) because that finding was inconsistent with the panel’s conclusion that he directly participated in the transfer; remanded for reconsideration of additional ethical violations arising from his direct involvement.

Issues

Issue	Younge (Appellant)	U.S. Trustee (Appellee)	Held
Whether Younge violated FRBP 9011 by filing the Opposition and Simmonds’s Declaration	He argued he was not involved in the transfer, made a reasonable inquiry about litigation effects, and acted to protect an ill client; filings did not cause improper delay	Filings re-litigated claims already rejected, lacked reasonable inquiry, were for improper purpose and increased litigation cost	Affirmed: Panel did not clearly err; filings violated FRBP 9011 (unreasonable inquiry, improper purpose, no legal basis)
Whether Younge violated California Rule of Professional Conduct 3-110(A) by failing to supervise Simmonds	Contended bankruptcy court lacked authority to apply CRPC, only State Bar may enforce, and he did not direct the transfer	Court and local rules adopt CRPC as standards for attorneys in the district; failure to supervise can be sanctioned even absent client complaint	Reversed: Panel’s CRPC 3-110 finding was inconsistent with its separate finding that Younge directly participated in the transfer; abuse of discretion
Whether the panel’s finding that Younge was aware of and involved in the property transfer was supported	Maintained he was unaware and did not participate; vouched that transfer was Singh’s idea and he learned later	Argued record supports inference of Younge’s knowledge and involvement given relationships, office practices, and testimony inconsistencies	Affirmed: District court found the panel’s credibility assessments and inferences were not illogical or implausible
Whether five-year suspension was an appropriate sanction	Argued suspension excessive if findings erroneous; conceded sanction appropriate if he actually participated in transfer	Urged suspension appropriate given misconduct and prior discipline; limited to bankruptcy practice	Affirmed: Because the court upheld finding of involvement and FRBP 9011 violation, five-year suspension upheld; remand limited to reconsideration of any additional sanctions tied to CRPC findings

Key Cases Cited

In re DeVille, 361 F.3d 539 (9th Cir. 2004) (abuse-of-discretion standard for bankruptcy attorney-discipline review)
Valley Nat’l Bank of Ariz. v. Needler (In re Grantham Bros.), 922 F.2d 1438 (9th Cir. 1991) (objective standard for reasonable inquiry under Rule 9011)
In re Greene, 583 F.3d 614 (9th Cir. 2009) (appellate review: clear-error standard for bankruptcy factual findings)
In re Marshall, 721 F.3d 1032 (9th Cir. 2013) (deference where multiple reasonable views of evidence exist)
In re Jones, 41 B.R. 263 (Bankr. C.D. Cal. 1984) (attorneys’ duty as officers of the court not to abuse judicial process)
Trousil v. State Bar of California, 38 Cal.3d 337 (Cal. 1985) (discipline for supervisory lapses and office-procedure failures)
Vaughn v. State Bar of Cal., 6 Cal.3d 847 (Cal. 1972) (failure to prevent unethical acts by staff can warrant discipline)
In re Brooks-Hamilton, 400 B.R. 238 (B.A.P. 9th Cir. 2009) (procedural framework for bankruptcy-court disciplinary authority)