IN THE DISTRICT COURT OF THE VIRGIN ISLANDS
BANKRUPTCY DIVISION
DIVISION OF ST. THOMAS AND ST. JOHN
In re: ) Involuntary Chapter 7
)
Elizabeth Service, ) Case No. 3:20-bk-30003 (MFW)
)
Debtor. ) Rel. Docs. 29 & 35
MEMORANDUM OPINION1
Before the Court is the Motion filed by Gordon Ackley,
Ackley Caribbean Enterprises, Inc. (“ACE”), FTM, LLC, and
Alexander Treml (the “Petitioning Creditors”) seeking
Reconsideration of the Court’s Opinion and Order dated April 7,
2021, which awarded attorneys’ fees to Anna Humnicky and Douglas
Chanco, counsel for Elizabeth Service (the “Motion”). The Motion
is opposed by counsel for Service. At the hearing on the Motion
held on May 20, 2021, the Court denied the Motion for the reasons
articulated on the record, which are stated below.
The basis of the Motion is that in its Opinion the Court
disallowed attorneys’ fees for any services rendered before
Attorney Humnicky was admitted pro hac vice. (D.I. 27 at 13,
citing Matter of Jindal, 69 V.I. 942, 944 (V.I. 2018).) They
contend, however, that the Court improperly concluded that she
had been properly admitted when the Court entered an order
1 This Memorandum Opinion constitutes the findings of
fact and conclusions of law of the Court pursuant to Rule 7052 of
the Federal Rules of Bankruptcy Procedure, which is made
applicable to contested matters by Rule 9014.
granting her pro hac vice application on October 28, 2020.2 They
argue that to be admitted pro hac vice in the Virgin Islands,
counsel must be sworn in by the Court, which was never done.
Attorney Humnicky argues that she was properly admitted
pursuant to the Virgin Islands requirements which she reviewed at
the time of her application. She notes there was no requirement
for the administration of the oath in either the Local Bankruptcy
Rules, the Local District Court Rules, or the Court’s website.
Attorney Humnicky further presented evidence that, prior to her
admission she had contacted the Clerk’s Office and had complied
with all the procedures she was told to follow.
The Petitioning Creditors contend, however, that the
administration of the oath was local practice and that Attorney
Humnicky and/or her local counsel, Attorney Chanco, should have
been aware of it. They further note that this “longstanding”
practice has recently been codified in amendments to the Local
District Court Rules by Order of Chief Judge Lewis dated
April 23, 2021.
After hearing argument, the Court concluded that Attorney
Humnicky had been properly admitted pro hac vice on October 28,
2020. At the time of her admission, the Local Bankruptcy Rules
2 In its Opinion, the Court incorrectly stated that the
order was entered on October 28, 2021. (D.I. 27 at 13.) The
Court stated at the hearing that it would grant the Motion only
to the extent of correcting the date.
2
required the filing of a written motion and an order entered by
the Court on that motion. LBR 9010-1B. The Rule further
provided that the Court may require evidence that the attorney
has been admitted in another district. Id. Finally, the Rule
required that the motion conform to the pro hac vice application
form which is available on the Court’s website and would “be
considered pursuant to the requirements of the District Court
rules.”
Id.
At that same time, there was no explicit requirement in the
Local District Court Rules that an oath be administered to pro
hac vice attorneys. Rule 83 simply provided that “Any attorney
who is a member in good standing of the bar of any United States
Court . . . may in the discretion of the Court, on motion, be
permitted to appear and participate in a particular case.” LRCi
83.1(b)(2).
Attorney Humnicky did file a motion for admission pro hac
vice, an application for admission in conformity with the form on
the Court’s website, and a certification from the 11th Circuit
that she was a member in good standing of the bar of Georgia.
Further, she paid the requisite fee, and an order was entered by
this Court admitting her. Thus, the Court concludes that
Attorney Humnicky complied with all the requirements for
admission that were extant at the time.
3
The Petitioning Creditors argue, however, that local
practice in the Virgin Islands required that a pro hac vice
attorney take an oath before practicing there. They argue that
the Jindal decision is applicable to this case and requires the
disallowance of Attorney Humnicky’s fees.
The Court rejects this argument. The Jindal case is
distinguishable because in that case the Court entered an order
requiring counsel to be sworn in, which counsel ignored. That is
not the case here. The Court’s order in this case did not
require that Attorney Humnicky take the oath. Further, neither
she nor the Court was aware of any such local practice. The
Court has not required the administration of an oath to pro hac
vice attorneys appearing in bankruptcy cases since at least 2009.
As noted above, the Local Bankruptcy Rules, which have been
revised many times since 2009, do not contain any such
requirement.
While the District Court orders admitting pro hac vice
attorneys may have contained such a requirement, they provided
that the oath was to be administered the first time the attorney
appeared in the territory. Thus, even under such a “local
practice,” the Court concludes that the requirement is not
applicable to Attorney Humnicky. She has never appeared in the
territory in connection with this case; all hearings have been
held remotely because of the pandemic.
4
The Petitioning Creditors nonetheless contend that the
District Court has recently been requiring that oaths be
administered to pro hac vice attorneys virtually. However, once
again neither Attorney Humnicky nor the Court was aware of that
practice; there is nothing on the Court’s website requiring that;
and it has only recently been included in District Court orders.
Finally, the Petitioning Creditors argue that the Local
District Court Rules now make it clear that to be admitted pro
hac vice an attorney must take the prescribed oath before
preforming any services. LRCi 83.1(b)(2) (amended April 23,
2021).
The Amended Rules provide that they are effective as of
April 23, 2021, and “govern all applicable proceedings brought in
this Court after they take effect.” (LRCi 1.1(c)&(d).) They
further state, however, that they “apply to all proceedings
pending at the time they take effect, except to the extent that
in the opinion of the Court the application thereof would not be
feasible or would work injustice, in which event the former rules
govern.” (LRCi 1.1(d).)
The Court finds that the retroactive application of the
Amended Rules to this case would not be feasible and would create
an injustice. Attorney Humnicky’s pro hac vice motion was filed
and granted almost six months before the amendment became
effective. Her services for the putative Debtor were concluded
5
almost five months before the effective date. The only matters
left are the consideration of attorneys’ fees under section
303(i)(1) of the Bankruptcy Code for the Petitioning Creditors’
improper filing of an involuntary petition against Ms. Service.
Thus, the Court will not apply the recent amendment of Local
District Court Rule 83.1(b)(2) retroactively.3
However, in light of the amendment to the Local District
Court Rules, the Court has amended its form order to require an
oath for pro hac vice attorneys appearing in bankruptcy cases and
will propose an amendment of the Local Bankruptcy Court Rules to
that effect. Furthermore, because additional contested matters
are pending in this case, the Court advised Attorney Humnicky at
the hearing to contact Judge Miller to arrange for the
administration of the oath.
For the foregoing reasons, the Court denies the Petitioning
Creditors’ Motion for Reconsideration of its Opinion and Order
dated April 7, 2021, except to the extent that the Opinion will
be amended at page 13 to reflect the correct date (October 28,
2020) of Attorney Humnicky’s admission.
3 As a result, the Court need not address Attorney
Humnicky’s argument that she cannot be sanctioned (by the denial
of her fees) for violating a rule of which she had no knowledge,
despite her diligent efforts to learn the requirements for pro
hac vice admission. See Fed. R. Civ. P. 83(b); Fed. R. Bankr. P.
9029.
6
An appropriate Order will be entered.
BY THE COURT:
Dated: May 27, 2021 WSS
Mary F. Walrath
United States Bankruptcy Judge
IN THE DISTRICT COURT OF THE VIRGIN ISLANDS
BANKRUPTCY DIVISION
DIVISION OF ST. THOMAS AND ST. JOHN
In re: ) Involuntary Chapter 7
)
Elizabeth Service, ) Case No. 3:20-bk-30003 (MFW)
)
Debtor. ) Rel. Docs. 29 & 35
O R D E R
AND NOW, this 27th day of May, 2021, for the reasons stated
in the accompanying Memorandum Opinion, it is hereby
ORDERED that the Motion for Reconsideration filed by Gordon
Ackley, Ackley Caribbean Enterprises, Inc. (“ACE”), FTM, LLC, and
Alexander Treml (the “Petitioning Creditors”) is hereby GRANTED
to the limited extent of correcting page 13 to reflect the
correct date of the admission of Attorney Humnicky, October 28,
2020; and it is further
ORDERED that the Motion for Reconsideration is hereby
DENIED in all other respects.
BY THE COURT:
Mary F. Walrath
United States Bankruptcy Judge
SERVICE LIST
Douglas B. Chanco, Esquire
Chanco Schiffer Law, LLC
9053 Sugar Estate, Suite 103
St. Thomas, USCI 00802
Counsel for the Movant
Leigh Goldman, Esquire
Goldman Law Offices, Inc.
9052 Estate Thomas, Suite 103
Royal Palms Professional Bldg
St. Thomas, VI 00802
Counsel for the Movant
Anna M. Humnicky, Esquire
Small Herrin, LLP
2727 Paces Ferry Road
Building Two, Suite 200
Atlanta, GA 30339
Counsel for the Movant
Kevin F. D’Amour, Esquire
Kevin F. D’Amour P.C.
P.O. Box 10829
St. Thomas, VI 00801
Counsel for the Petitioning Creditors