Bankruptcy “Vehicle Surrender Program” Gets Attorney Suspended: “It Was Convenient”

An 18-month suspension has been imposed by the Arizona Presiding Disciplinary Judge for vehicle-related misconduct in two bankruptcy matters. 

…in September 2015, Mr. Guinn filed a bankruptcy for a client dying from terminal cancer who had liens on his vehicles. Mr. Guinn and his  daughter appeared at his client’s home and personally drove away the vehicles of the client prior to Mr. Guinn filing the bankruptcy for his him [sic]. The client died in December 2015. In that same month, the lienholder received a notification from a company called Sperro Towing in Indiana, threatening that if the lender failed to pay towing and storage costs of $5,232.85 the client’s vehicles would be sold. When the lienholder arranged to pay those fees, lienholder was told the cars had already been sold.

When confronted by the lienholder with the fact that his daughter and he had personally taken the vehicles, Mr. Guinn was asked why the vehicles had been taken to Indiana. Mr. Guinn responded, “It was convenient.”

In the client bankruptcy matter, the U.S. Trustee moved for Denial of Prior Fees and Request for Disgorgement. In the motion it was stated Mr. Guinn was paid his fee by Fenner & Associates affiliated with Sperro Towing. The Trustee pointed out “the collusive scheme between Mr. Guinn and Mr. Fenner, whereby Mr. Fenner paid Mr. Guinn’s attorney’s fees, in exchange for Mr. Guinn facilitating the transfer of the vehicle to Mr. Fenner.” Mr. Guinn did not respond to the motion and failed to appear for a hearing on the motion. The Court ordered Mr. Guinn to appear.

At the hearing Mr. Guinn revealed he had no written agreement with Fenner explaining how he would receive his fees but he had advised his client to contract with Mr. Fenner and that Mr. Fenner paid Guinn $1,500. The Court ordered Mr. Guinn to list all the bankruptcy cases in which he received payment from Mr. Fenner or his entities. Mr. Guinn admitted he had a relationship with Mr. Fenner in 24 other cases. The Court ordered he disgorge himself of all fees collected through his involvement with Mr. Fenner. Mr. Guinn and the Trustee settled these matters.

In a second bankruptcy matter

Mr. Guinn represented a client in a bankruptcy matter in 2015. The client asked about attorney fees, and Mr. Guinn advised he could participate in his “vehicle surrender program” that would cover his $1,200 attorney fee. The client agreed to participate in the program, and Mr. Guinn arranged for a transfer of the client’s vehicle to Sperro Towing in Indiana. He assured the client he could file for bankruptcy in three weeks.

After the three weeks passed, his client repeatedly attempted to contact Mr. Guinn with no answer for over a month. The lien holder made demands on the client. When Mr. Guinn finally responded to his client, he told him he was filing the bankruptcy and to have the lienholder contact him directly. Mr. Guinn then told the lienholder his client had transferred the car out of state. Mr. Guinn told his client that the action taken was not illegal. When the lienholder told client he could face criminal prosecution under A.R.S. 13-1813, the vehicle was returned to the lienholder without client’s knowledge.

The sanction was imposed by consent.

The Indiana Lawyer had a story last November about litigation involving Sperro Towing. (Mike Frisch)