Asociacion de Titulares de Condominio Castillo v. Dimarco
- Case Type:
- Case Status:
- 17-009 (1st Circuit, Feb 08,2018) Published
- First, a motion for “reconsideration” under Fed. R. Civ. P. 59 or 60 does not toll the 14-day deadline for filing an appeal under Fed. R. Bankr. P. 8002(b). Second, since the discharge in chapter 7 is available only to an individual debtor, the bankruptcy court did not err in dismissing “for cause” the chapter 7 filing of a non-individual debtor that had no assets to marshal or liquidate for distribution to creditors. Although not dispositive of the ruling, the court also held that a condominium association is a “person” for purposes of debtor eligibility under § 109.
- Procedural context:
- A condominium association filed a voluntary petition for chapter 7 relief after judgments were entered against it in favor of a homeowner and the Department of Housing and Urban Development based on charges of housing discrimination. The homeowner-judgment creditor filed a motion to dismiss the case under § 707(a) for cause arguing that the debtor had filed bankruptcy for an improper purpose. The bankruptcy court dismissed the case, finding that the condominium association was not a “person” and therefore ineligible under § 109 and that the case had been filed for an improper purpose. Fifteen days after the dismissal order was entered, the debtor filed a motion for reconsideration and, following denial of that request, appealed both the dismissal order and the denial of reconsideration. The BAP dismissed as untimely the appeal of the dismissal order and affirmed the order denying reconsideration.
- In the 341 meeting it was revealed that, before filing bankruptcy, the debtor turned over management of the condominium to a newlyformed homeowners’ association that assumed management responsibilities, including the collection of homeowner dues, and paid paid or planned to pay all of the debtor’s debts except for those of the judgment creditors.
At the hearing on the motion to dismiss, the bankruptcy court (erroneously, the BAP determined) concluded that a condominium association was not a “person” for purposes of § 109 and there was ineligible for chapter 7 relief. Although the BAP expressly concluded this was legal error, the BAP nevertheless concluded the bankruptcy court did not err in dismissing the case given that cause for dismissal was otherwise present insofar as the debtor’s purpose in filing for relief was inconsistent with the purpose of chapter 7.
- Feeney, Harwood, and Fagone.
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!