In re Marroquin

Summarized by Lovee Sarenas , Sklar Hirsh
12 years 9 months ago

Citation:

Unpublished opinion

Tag(s):

Ruling:

The Bankruptcy Appellate Panel, in a 2-1 vote, ruled that it had no jurisdiction to rule on the appeal and therefore, dismissed the appeal.

Procedural context:

A debtor appealed a bankruptcy court's ruling denying her motion to refile a chapter 13 case after the bankruptcy court dismissed her former chapter 13 case with a 20-year bar. The dismissal order further provided that debtor cannot file another bankruptcy case absent a motion that establishes cause to file another bankruptcy case. On appeal, debtor's counsel represented to the court that the debtor no longer intends to file a new chapter 13. Consequently, the BAP dismissed the appeal finding that there was no live case or controversy. Judge Montali dissented finding that the appeal was not moot merely because debtor's counsel represented to the panel debtor's intent not file a bankruptcy case at the time.

Facts:

The controversy is purely procedural. The chapter 13 case that led to the appeal was the debtor's fourth bankruptcy case in two years and the third chapter 13 case in over a year. The first was a chapter 7 case for which the debtor obtained a discharge in 2009. The second was a chapter 13 case dismissed in May 2010 for failure to file schedules. The third was dismissed in March 2011 again for failing to file the requisite schedules. Dismissal of the third case was due to counsel's error and thereafter, a fourth case was filed under chapter 13. While the debtor filed a complete set of petition papers, the chapter 13 trustee objected at confirmation citing debtor's failure to make plan payments and ineligibility to be a chapter 13 debtor. After finding that debtor had multiple prior bankruptcies and failed to make plan payments, the court dismissed the case under sec. 349 and ruled that the debtor cannot file another bankruptcy case without a motion showing cause to do so. Notwithstanding that three notices went out to the debtor stating that her case may be dismissed with a 180-day bar to refiling, the dismissal order (and the docket) provided for a 20-year bar to refiling. The debtor did not appeal the dismissal order; hence, it has become final. Obtaining new counsel, debtor sought permission to file another bankruptcy case explaining that her failure to make payments under her chapter 13 plan was because she was caring for her dying husband (who has sinced died) but that she is now able to comply with all the requirements of filing and to diligently pursue her case if allowed to do so. Her new counsel also committed to representing the debtor and enumerated the tasks he intended to accomplish in representing debtor. The bankruptcy court denied the motion based on debtor's prior bankruptcy filings and finding that the debtor used her bankruptcy cases to utilize the automatic stay but ignored the cases when it was difficult and inconvenient for her to prosecute her cases. At oral argument before the BAP, debtor's counsel stated that even if the panel were to reverse the order denying the motion to refile, debtor had no present intent to prosecute a bankruptcy case. Based on such statement, the panel found the appeal to be moot because was no live case or controversy. The dissent argued that notwithstanding debtor's counsel's statement, the denial order remained extant and precludes debtor from refiling in the future. Furthermore, the bankruptcy court abused its discretion in denying the motion because it failed to find bad faith in denying debtor's motion to refile as required by Levitt v. Soto, 171 F.3d 1219 (9th Cir. 1999). Instead, the court found multiple bankruptcy filings as the basis for dismissing the case with prejudice. This is abuse of discretion because sec. 109(g) provides the remedy for multiple filings or willful disobeyance of a court order and not dismissal with prejudice.

Judge(s):

Appeal from a decision by the Hon. Vincent Zurzolo. Before bankruptcy appellate panel judges Dennis Montali, Bruce Markell and Laura Taylor.

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