Know-it-all bankruptcy judge tough on attorneys, law firms

U.S. Bankruptcy Judge Bruce Markell is a tough hombre with demanding standards.

He expects attorneys who practice before him to be ethical and competent. And he’s using the persuasive power of the pen to get that message out.

Instead of just slapping a few hands in court, Markell authored three take-no-prisoners published opinions reprimanding attorneys and even sanctioning a bank.

He has a reputation as a know-it-all, but a know-it-all who knows his stuff. Attorneys describe him as “undeniably brilliant” but also arrogant and rigid.

He spent 10 years practicing bankruptcy law in Los Angeles before moving into the academic world in 1990. He still teaches at UNLV’s Boyd School of Law and became a bankruptcy judge in 2004.

In August, Markell publicly reprimanded attorney Neil Beller and said the State Bar of Nevada should look at Beller’s dual representation of two clients in the same case. (More about Beller later.)

Also in August, Markell publicly reprimanded the Cooper Castle law firm, privately reprimanded one of its junior attorneys and sanctioned Wells Fargo Bank for bad faith conduct, ordering it to pay certain legal fees.

Markell’s wrath was incurred when a Cooper Castle attorney representing Wells Fargo and an attorney representing a husband and wife both signed a stipulation agreeing to surrender two of three homes the couple owned. But the stipulation mistakenly surrendered the home Hector and Tiffany Martinez wanted to keep as a residence.

Instead of correcting the mistake, Wells Fargo ordered the attorney not to consent to vacating the stipulation.

Markell didn’t take kindly to that, saying attorneys were obligated to tell clients when they were doing something wrong.

The junior associate was doing the bidding of the bank and his higher-ups at the law firm.

By following the bank’s orders, knowing they were wrong, Cooper Castle and its lawyers became “unthinking agents,” he wrote.

In 2006, Markell sanctioned the Henderson law firm Harris Merritt Chapman and partner Scott Chapman, saying the firm and Chapman “who had no background or training in Chapter 11, agreed to represent a client who had no business being in bankruptcy.”

This case over a Porsche resulted in Markell ordering a combination of public reprimands, admonishments and educational requirements.

He banned the firm from appearing in bankruptcy court or advertising bankruptcy as a specialty until at least one member attended continuing education classes in bankruptcy and ethics.

Chapman has appealed Markell’s opinion to the 9th U.S. Circuit Court of Appeals.

Markell is the only bankruptcy judge in Las Vegas who is aggressive about publicly and harshly reprimanding attorneys. He is demanding ethical behavior and legal expertise and wants to avoid unnecessary and costly hearings.

Sounds like he’s trying to protect the public’s interest by raising the bar.

CORRECTION: In my Sept. 4 column about Beller’s public reprimand by Markell, I made two mistakes; and I want to correct the errors involving Beller’s dual representation of Joseph and Jo Ann Rossana and Las Vegas attorney John Momot.

Some condensed background in the case: Momot obtained a judgment of $225,779 from Beller’s clients, the Rossanas, over the sale of a bar in 1987. A judge later decided Momot seized $28,559 too much property and Momot owed that to the Rossanas. Beller exercised a judgment against Momot’s bank account for the $28,559 in 2003. Momot later asked Beller if he could remove the judgment because it was hurting his credit and reputation. Beller, acting as Momot’s attorney, asked the court to set aside the judgment because it had already been paid.

I wrote: “Momot asked Beller if he could remove the judgment against his bank account.” That was wrong because, at that time, there was no pending judgment against Momot’s bank account. It had been satisfied.

I wrote: “Basically, he asked the court not to go after the $28,559 in Momot’s bank account, money that should have gone to the Rossanas.” Again, that was wrong because Momot already had paid the Rossanas.

Despite that, Markell wrote, “Although Beller claims no prejudice, he did not secure from Momot any agreement not to take action against the Rossanas if Beller was successful in setting aside the judgment.” The judge said that was important, because “Momot could have conceivably sought to recover the funds garnished.”

Beller’s appeal of the judge’s public reprimand is pending in U.S. District Court.

Jane Ann Morrison’s column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call (702) 383-0275.