Dudley v. Simmons (In re Dudley)

Dudley v. Simmons (In re Dudley), BAP No. AZ-12-1631-KuDPa (BAP 9th Cir. Feb. 26, 2014)
The Ninth Circuit BAP affirmed bankruptcy court's (Arizona) dismissal of Chapter 13 case following expiration of sixty month term of confirmed plan and material default. The BAP perceived no abuse of discretion in the bankruptcy court's conclusion that debtor's failure to pay his ex-wife's secured claim under his confirmed plan was sufficient cause for dismissal and that dismissal was in the best interest of creditors and the estate under 11 USC 1307(c) where debtor's ex-wife was the sole remaining unsecured creditor of the estate. The BAP affirmed the bankruptcy court's rejection of debtor's defense that the failure to perform under the plan was "not his fault," because the Phoenix housing market prevented him from obtaining the necessary funds through a mortgage refinance.
Procedural context:
Ninth Circuit BAP reviewed decision of bankruptcy court (District of Arizona) granting creditor's motion to dismiss debtor's Chapter 13 case following material default under plan on continuing defaults and motion after more than sixty months after plan confirmation.
Following divorce, debtor was awarded marital residence, and ex-wife was awarded $208,000 (ex-wife's share of marital residence), secured by lien in property, in addition to other assets. After unsuccessfully appealing the decree in state court, debtor filed bankruptcy under Chapter 13. Ex-wife was debtor's principal creditor, and her unsecured claim of $212,904 was approximately ten times the amount of all other unsecured claims combined. After unsuccessfully attempting to avoid ex-wife's lien, and proposing various plans that did not pay his ex-wife's lien, debtor confirmed a third amended Chapter 13 plan providing for payment in full of ex-wife's secured claim (subsequently modified in a fourth amended plan to allow debtor to seek subsequent modification). Following multiple defaults under the plan, and after 60 months since confirmation, ex-wife filed a motion to dismiss the bankruptcy. Following several hearings, and debtor's failure to propose any cure, or excuse other than inability to obtain the necessary funds due to Phoenix's housing market, the bankruptcy court granted the motion.
Kurtz, Dunn, and Pappas

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