Jeffrey N. Schatzman
Schatzman & Schatzman, P.A.
Miami, Florida
If you represent individual debtors
and take credit cards for payment of your fees, you might want to re-think that
policy. On March 30, 2018, the Eleventh
Circuit Court of Appeals in Cadwell v. Kaufman, Englett & Lynd, PLLC, Case No. 17-10810, reinstated a suit against
Kaufman, Englett & Lynd (“KEL”) for violation of 11 U.S.C. Sec. 526(a)(4). You can find the opinion here.
Requiring Credit Cards Concerns Client
Loyd
Cadwell had sought the services of KEL to file a chapter 7 bankruptcy
case. Following the initial meeting,
Cadwell entered into a retainer agreement with KEL that provided for KEL to be
paid a fee of $1,700.00 to represent Cadwell in the chapter 7 case. The agreement provided for payments to be
made in installments over several months.
Cadwell alleged in his complaint that he was instructed by KEL to make
the installment payments by credit card. Cadwell made the initial payment and
three additional installments with two different credit cards. Thereafter, Cadwell terminated the engagement
with KEL and sought the services of another firm to assist him with his
bankruptcy.
Cadwell’s
new attorneys noticed the credit card payments and filed suit on behalf of
Cadwell for violation of 11 U.S.C. § 526(a)(4), seeking return of fees paid to
KEL and punitive damages of $1 million.
The lawsuit is also proposed as a class action.