Stevenson v. Homes

Case Type:
Case Status:
1st Circuit BAP No. MB 17-035 (1st Circuit, Apr 30,2018) Published
The First Circuit BAP affirmed dismissal of the debtor’s Chapter 13 case holding the bankruptcy court did not abuse its discretion in dismissing the case for unreasonable delay that is prejudicial to creditors under Section 1307(c)(1). After reviewing the debtor’s previous repeat filings, her stated purpose of filing the recent case (i.e., to pay off other debt), and her dispute with her landlord, the Panel concluded that the pattern of conduct supported the unreasonable delay finding and a dismissal of the Chapter 13 case.
Procedural context:
The debtor filed a Chapter 13 case within one year of concluding her prior Chapter 7 case. Prior to the Chapter 7 case, the debtor was involved in a contested summary process action with her landlord (TND Homes I, LP) for failure to pay rent. During the Chapter 7 case, the debtor paid TND in full and received her discharge. Within several months, the debtor violated her lease again resulting in another summary process action for cause. The debtor counterclaimed based on conditions at the property. The day before the bench trial in state court, the debtor filed her Chapter 13 case. TND moved to dismiss the debtor’s chapter 13 case pursuant to 11 USC 1307(c) for lack of good faith and that her bankruptcy case was a two-party dispute and she had no debts to reorganize following the conclusion of her Chapter 7 case. After hearing, the Bankruptcy Court granted the motion to dismiss under Section 1307 for unreasonable delay. After dismissal, the debtor filed an adversary proceeding against TND alleging it violated the Massachusetts Anti-SLAPP statute by retaliating against her for complaining about the uninhabitable conditions at the property. The Bankruptcy Court dismissed for lack of subject matter jurisdiction because of the dismissed Chapter 13 case. The debtor appealed only the dismissal of her Chapter 13 case. She also requested injunctive relief to stay the state court summary process action, which the Panel denied.
This appeal stems from a two party dispute between the debtor and her landlord (TND Homes I, LP) following the conclusion of the debtor’s Chapter 7 case where she received a discharge and TND was paid in full. After she received her discharge, the debtor again stopped paying rent, refused to allow an inspection of her unit and violated her lease by keeping a dog. TND filed another summary process action (this time for cause), but the debtor counterclaimed based on the conditions at the property, including lack of heat and hot water. The day before the bench trial in state court, the debtor filed her Chapter 13 case. On her schedules, she listed $30,000 worth of assets, only two creditors for student loan debt and listed the lease on her Schedule G (executory contracts and leases). The Bankruptcy Court first ruled that the debtor was not entitled to a discharge given her prior filings. TND then moved to dismiss, which was granted under Section 1307(c) for unreasonable delay. The debtor opposed, and also filed a fifth amended plan of reorganization resulting in the Chapter 13 trustee’s objection to confirmation based on feasibility. At the motion to dismiss hearing, the Bankruptcy Court granted the motion finding the lease was terminated for cause under state law, the debtor received her discharge and the only place to complain about the landlord and/or the property was in state court.
Lamoutte, Finkle, and Harwood

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