Armstrong v. IRS (In re Armstrong)

Summarized by Jamie Edmonson , Robinson & Cole LLP
12 years 11 months ago

Citation:

BAP Nos. CC-11-1554-KiRnPa and CC 11-1476-KiRnPa (Consolidated) (not for publication and not precedent except as provided by 9th Cir. R. 36-3)

Tag(s):

Ruling:

Dismissed in part and affirmed in part.

Procedural context:

Appeal from the United States Bankruptcy Court for the Central District of California.

Facts:

Gary Olyn Armstrong ("Appellant") appealed three orders of the bankruptcy court: (i) an order dismissing his chapter 7 case for failure to obtain prepetition counseling as required by Bankruptcy Code section 109(h) (the "Dismissal Order"); (ii) an order dismissing his adversary proceeding against the Internal Revenue Service, the California Franchise Tax Board, and the Motion Picture Industry Pension & Individual Account Plan (the "Adversary Dismissal Order"); and (iii) an order denying his motion for reconsideration of the Adversary Dismissal Order (the "Reconsideration Order"). The Bankruptcy Appellate Panel for the Ninth Circuit ("BAP") dismissed the appeal with the respect to the Dismissal Order on the basis that Appellant's appeal was untimely when it was filed 45 days after the Dismissal Order was entered. With respect to the Adversary Dismissal Order, the BAP affirmed the bankruptcy court's order, although it found that the lower court had applied an incorrect standard of law when dismissing the adversary proceeding. The BAP found that the bankruptcy court erred in holding that it did not have subject matter jurisdiction with respect to the adversary proceeding due to the dismissal of Appellant's bankruptcy case. The bankruptcy court should have applied the factors of judicial economy, convenience, fairness and comity when making the decision to dismiss the adversary proceeding. The BAP, however, found harmless error and that consideration of these factors would have still weighed in favor of dismissal. Thus, the BAP affirmed the bankruptcy court's ruling on the Adversary Dismissal Order. Finally, the BAP held that the bankruptcy court did not abuse its discretion when it denied Appellant's motion for reconsideration. The BAP indicated that, even though the bankruptcy court applied an incorrect standard of law in dismissing the adversary proceeding, Appellant failed to raise that issue on appeal and affirmed the Reconsideration Order.

Judge(s):

KIRSCHER, RENN, and PAPPAS, Bankruptcy Judges

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