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Joseph Hill v. Raquel King

Summarizing by J Newman

Olson v. Van Meter

Debtor must violate criminal law to justify dismissal, concurring opinion says.

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Case Type:
Case Status:
Reversed and Remanded
NV-17-1168-LTiF (9th Circuit, Feb 05,2018) Not Published
BAP for 9th Cir. reversed and remanded ruling of bankruptcy court (D. Nev.-Reno) dismissing chapter 13 debtor's case sua sponte on ground that debtor's postpetition acceptance of rent from marijuana dispensary was ongoing criminal violation. Bankruptcy court's failure to specify any bankruptcy code section basis for dismissal of case compelled reversal and remand and prevented review of the merits of dismissal under abuse of discretion standards.
Procedural context:
Bankruptcy court sua sponte dismissed chapter 13 case. Debtor appealed to BAP for 9th Circuit.
Ninety-two year old debtor, legally blind, and residing in assisted living facility, sought chapter 13 relief to stop foreclosure of her commercial real property. One of the tenants at the property operated a marijuana dispensary legal under California law. Debtor's plan called for her to sell the commercial real property to pay off all creditors. At the hearing on the motion to sell and reject the lease with the tenant, the bankruptcy court dismissed the case sua sponte on the ground that debtor's postpetition acceptance of rents from the dispensary business was an ongoing criminal violation that disqualified her for bankruptcy relief.
Lafferty, Tighe, Faris

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