Merrill v. Bessler (In re Bessler)

BAP No. NV-15-1427-LDoKi (BAP 9th Cir. Nov. 1, 2016) (unpublished)
The BAP for the 9th Circuit reversed and remanded the ruling of the bankruptcy court (D. Nev.) dismissing plaintiff's adversary complaint for failure to prosecute after plaintiff failed to appear at a continued status conference. BAP ruled that because record revealed no basis for finding of unreasonable delay or prejudice to defendant, and no apparent consideration of less drastic sanction, the bankruptcy court abused its discretion in dismissing the complaint.
Procedural context:
Creditor commenced adversary against debtor, and court set continued scheduling conference, at which creditor failed to appear. Court dismissed adversary for failure to prosecute, and creditor appealed to BAP for 9th Circuit.
Pro se creditor, who was incarcerated, filed suit against chapter 7 debtor alleging conversion, breach of contract, and breach of fiduciary duty, including exception from discharge, and damages in excess of $760k. Debtor filed answer denying allegations. Creditor filed motion for summary judgment and contempt citation, asserting that debtor, through denials, was making false statements to court. Court set a scheduling conference on creditor's motion, but creditor failed to appear. Court issued order to show cause why case should not be dismissed, and set return hearing. Creditor did not file a response to order to show cause, but did file motion to appear by telephone. Debtor filed motion to dismiss complaint, which court set for hearing with continued status conference. Court approved appearance by telephone and creditor appeared by phone. At hearing, the court directed parties to mediation, expressed irritation toward creditor, and encouraged creditor to settle. Court continued scheduling conference. Prior to continued hearing, creditor exchanged emails with deputy clerk requesting dates for settlement conference, where creditor expressed confusion over the scheduling of the continued hearing date, and expressing scheduling conflicts with the continued hearing date. Two days after the continued scheduling conference, the court dismissed adversary case as a sanction for debtor's failure to prosecute.
Lafferty, Dore, Kirscher

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