O'Hara v. Vara (In re O'Hara)
- Summarized by David Treacy , U.S. Bankruptcy Court, Eastern District of Kentucky
- 1 week 1 day ago
- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- 25-1203 (6th Circuit, Feb 11,2026) Published
- Tag(s):
-
- Ruling:
- The U.S. Court of Appeals for the Sixth Circuit held it had jurisdiction to review a bankruptcy court's denial of a chapter 13 debtor's Civil Rule 60(b) motion and affirmed, concluding his failure to seek dismissal of his case prior to entry of an order converting the case was a strategic choice, not excusable neglect. His absolute right to dismiss under 11 U.S.C. § 1307(b) terminated upon entry of the conversion order. The majority rejected the dissent's view that the panel lacked jurisdiction over the appeal on the basis that the debtor had not sought relief from the conversion order.
- Procedural context:
- The majority held appellate jurisdiction under 28 U.S.C. § 158 existed because Debtor's notice of appeal and briefing, liberally construed, effectively sought review of the Civil Rule 60(b) order, which itself addressed the conversion order, a final, appealable order . The majority emphasized that bankruptcy notices of appeal should be read flexibly and that both the U.S. Trustee and the district court treated the conversion order as within the scope of Debtor's appeal. The majority concluded that review of the Civil Rule 60(b) order necessarily encompassed Debtor's challenge to the continued validity of the conversion order. The dissent concluded appellate jurisdiction was lacking because Debtor never actually asked for (or wanted) substantive relief from the conversion order. Accordingly, it stated, the Civil Rule 60(b) motion could not be re-characterized as an appeal from the conversion order. It disagreed with the majority's liberal construction of the notice of appeal and implicit use of pendent appellate jurisdiction. Rather, the dissent explained, the appeal was an improper attempt to reach an unappealed, final order.
- Facts:
- Debtor/Appellant Thomas O'Hara filed a chapter 13 bankruptcy petition in the U.S. Bankruptcy Court for the Western District of Michigan. The U.S. Trustee, Appellee Andrew Vara, moved to dismiss the case under 11 U.S.C. § 1307(c), advising in the motion that the case might be converted to a chapter 7 proceeding. The bankruptcy court held a hearing, concluded there was cause to dismiss or convert the case, and stated on the record that conversion would be the better option. The court advised Debtor's counsel that an order would issue converting the case. The court also stated that, before the order was entered, Debtor had "an absolute right to dismiss the case" and, further, that "the case will not be converted until I enter the order converting the case." The court also told Debtor's attorney: "you should act with quickness if your intention is to have the matter dismissed rather than converted." The hearing on the motion adjourned at 12:05 pm. The bankruptcy court entered an order converting the case to chapter 7 at 5:48 pm. And at 7:12 pm, Debtor (through counsel) filed a "Notice of Voluntary Dismissal" of his chapter 13 case under 11 U.S.C. § 1307(b), stating that the case “has not been converted.” The court construed the Notice as a motion and denied it the following day because "[t]he conversion order was entered before [Debtor]’s motion was filed, 'and it does not matter whether the case is under the provisions of chapter 7 for an hour, a day, or a year. Entry of the Conversion Order ended the Debtor’s nearly unconditional right to dismiss the case.'” Almost two months later, Debtor filed a Civil Rule 60(b) motion seeking to unwind the conversion and obtain a dismissal based on excusable neglect and, essentially, a "harmless error" theory. Debtor claimed his lawyer believed he would have time to dismiss the case after the hearing and the timing of the conversion order "circumvented" Debtor's dismissal right. The bankruptcy court denied the motion, explaining Debtor lost the absolute right to dismiss following entry of the conversion order. The court also stated Debtor's "counsel’s timing mistake should not be forgiven as excusable neglect" because Debtor "'was aware of the possibility of conversion, but rather than asking for dismissal in the alternative, he instead sought adjournment of the confirmation hearing, clearly indicating a desire to reorganize.'” In this way, the bankruptcy court held, the "opposition to dismissal 'reflect[ed] his litigation strategy decisions, not an excusable mistake.'” Debtor took an appeal to the U.S. District Court for the Western District of Michigan, which affirmed. Debtor then took an appeal to the Sixth Circuit.
- Judge(s):
- Moore, Bush, and Davis
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