Opinion
Bankruptcy Case No. 03-83019
April 6, 2004
OPINION
This matter having come before the Court for hearing on Trustee's Motion for Dismissal, Motion to Dismiss filed by Creditors, R. Victor Hanks and Genevieve M. Hanks, Second Motion to Dismiss filed by Creditors, R. Victor Hanks and Genevieve M. Hanks, Objection to Trustee's Motion for Dismissal filed by the Debtor, and Request for Order from the Court filed by the Debtor; the Court, having heard arguments of the parties and being otherwise fully advised in the premises, makes the following findings of fact and conclusions of law pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure.
Findings of Fact
The Court finds, in order to adequately address the issues raised in the pleadings presently before it for consideration, that a chronology of events is helpful. That chronology is as follows:
1. The Debtor first filed for bankruptcy relief under Chapter 13 of the Bankruptcy Code on January 24, 1997, in Case No. 97-80257. Said case was subsequently dismissed, on August 21, 1997, for the Debtor's failure to formulate a confirmable plan.
2. The Debtor next filed for relief in the Bankruptcy Courts in Wisconsin, in 1998. The Wisconsin Bankruptcy Court summarily dismissed the Debtor's filing for her failure to meet the residency requirements under the Bankruptcy Code.
3. The Debtor again filed for relief in this District on June 24, 1998, in Case No. 98-82365, under Chapter 13 of the Bankruptcy Code. Case No. 98-82365 was subsequently converted to Chapter 7, due to the Debtor's failure and inability to produce a confirmable Chapter 13 plan. The Debtor subsequently received a Chapter 7 discharge in Case No. 98-82365, and the case was eventually closed on February 25, 2003, after extensive litigation between the Chapter 7 Trustee and the Debtor.
4. On September 23, 2002, while Case No. 98-82365 still remained open, the Debtor again filed for relief under Chapter 13 of the Bankruptcy Code in Case No. 02-84331. This Chapter 13 case was confirmed on December 12, 2002. However, within 30 days of the confirmation order, the Debtor requested and was granted a voluntary dismissal on January 9, 2003.
5. Case No. 03-83019, which is presently before the Court, was filed by the Debtor as a Chapter 13, on June 20, 2003. When this case was originally filed, the Debtor did not file a proposed Chapter 13 plan; and, as such, was sent a notice on June 23, 2003, indicating that a plan should be filed on or before July 8, 2003. The Debtor's Chapter 13 Plan was, in fact, filed, as requested, on July 8, 2003.
6. On July 11, 2003, the Chapter 13 Trustee, Richard A. Bowers, filed Trustee's Motion for Dismissal, which essentially indicated that the present Chapter 13 filing of the Debtor should be dismissed for the reason that the schedules were incomplete, debts listed on those schedules were not properly categorized nor identified, and that the Debtor's numerous bankruptcy filings amounted to an abuse of the process. All of these reasons are actionable under 11 U.S.C. § 1307 and 1325.
7. On July 14, 2003, the Court caused a notice to be sent to all parties scheduling a § 341 Meeting of Creditors in Rock Island, Illinois, for 8:30 a.m., on August 14, 2003, with a confirmation hearing to follow at 10:00 a.m., on the same date.
8. At the first meeting of creditors in Rock Island, Illinois, on August 14, 2003, the Debtor appeared, but refused to answer nearly all questions posed to her by both the Trustee, Richard A. Bowers, and Attorney Thomas A. Blade, on behalf of Creditors, R. Victor Hanks and Genevieve M. Hanks. Rather than answer the questions posed, the Debtor chose to asserther rights under the Fifth Amendmentto the Constitution. Basedupon her assertion of the Fifth Amendment, the first meeting of creditors on August 14, 2003, was unable to be completed, and the Debtor, thereafter, sought immunity from the Office of the United States Attorney as to the matters raised at the first meeting of creditors. The Debtor's request for immunity was denied by the Office of the United States Attorney.
9. On October 20, 2003, Creditors, R. Victor Hanks and Genevieve M. Hanks, filed a Motion to Dismiss requesting dismissal of the Debtor's Chapter 13 case, citing the Debtor's multiple bankruptcy filings as an abuse of process, with a request that the current Chapter 13 case be dismissed with prejudice, and an order be entered preventing the Debtor from filing a new petition for an appropriate period of time.
10. On November 10, 2003, Creditors, R. Victor Hanks and Genevieve M. Hanks, filed a Second Motion to Dismiss citing as a basis for dismissal Debtor's refusal to answer questions by the Trustee and Attorney Thomas A. Blade, on behalf of Creditors, R. Victor Hanks and Genevieve M. Hanks, at the § 341 Meeting of Creditors held on August 14, 2003, in Rock Island, Illinois. Creditors, R. Victor Hanks and Genevieve M. Hanks, alleged that the Debtor's refusal to testify and answer questions at the § 341 Meeting of Creditors on August 14, 2003, was an abuse of the bankruptcy system and an abuse of her exercise of the Constitutional privilege afforded under the Fifth Amendment not to incriminate herself. Creditors, R. Victor Hanks and Genevieve M. Hanks, filed a brief in support of the Second Motion to Dismiss entitled "Memorandum on Dismissal Proceeding When Debtor Exercises the Privilege Against Self-Incrimination."
11. On December 11, 2003, a hearing was held on the Debtor's Chapter 13 Plan, Trustee's Motion for Dismissal, and two Motions to Dismiss filed by Creditors, R. Victor Hanks and Genevieve M. Hanks. This hearing was held before Judge Thomas Perkins. During the course of the hearing on December 11, 2003, the Debtor made an oral motion for Judge Perkins to recuse himself. This oral motion for recusal was, in fact, subsequently granted by an Order entered on December 17, 2003, by Judge Perkins, and the case was reassigned to Judge Gerald D. Fines, also by an Order entered on December 17, 2003.
12. On December 23, 2003, the Court caused a notice to be sent scheduling the Debtor's Chapter 13 Plan, Trustee's Motion for Dismissal, and the two Motions to Dismiss filed by Creditors, R. Victor Hanks and Genevieve M. Hanks, for hearing at 10:00 a.m., on February 19, 2004, in Rock Island, Illinois. The Debtor's Objection to Trustee's Motion for Dismissal was also set at this time.
13. On February 13, 2004, the Debtor contacted this Judge's Chambers by telephone, and indicated that she would agree to attend a rescheduled § 341 Meeting of Creditors and answer all questions posed by the Trustee and any creditors present. The Debtor was advised during this telephone conversation that the hearing scheduled on her Chapter 13 Plan, the Trustee's Motion for Dismissal, and the two Motions to Dismiss filed by Creditors, R. Victor Hanks and Genevieve M. Hanks, would be continued generally, and, in its place, there would be a continued § 341 Meeting of Creditors. The Court also gave telephonic notice of this change in schedule to Trustee, Richard A. Bowers, and Attorney Thomas A. Blade. Additionally, on February 13, 2004, the Court caused a written notice to be sent to all parties that a continued § 341 Meeting of Creditors would be held on February 19, 2004, at 10:00 a.m., in Rock Island, Illinois.
14. On February 19, 2004, at 8:30 a.m., prior to the time set for the continued
§ 341 Meeting of Creditors, the Debtor filed an "Emergency Motion to Continue Continued Meeting of Creditors 19 February 04." In this Motion, the Debtor stated various reasons for her desire for an emergency continuance. Among those reasons was the fact that her sister was undergoing very serious surgery that morning in Wisconsin. The Emergency Motion was filed only 1 1/2 hours before the meeting, and the Court took no action prior to learning that the Debtor did not appear at the continued § 341 Meeting of Creditors in Rock Island, Illinois.
15. On February 19, 2004, rather than appearing at the continued § 341 Meeting of Creditors, the Debtor filed a pleading entitled "Complaint" and one entitled "Emergency Motion Ex Parte for Protection/Intervention" with the United States District Court, Central District of Illinois, Rock Island Division. The Complaint and Emergency Motion were assigned Case No. 04-4006. The Complaint named in excess of 12 defendants, including the Bankruptcy Court for the Central District of Illinois. The Complaint alleged that the defendants were guilty of "FRAUDS, THEFT, COLLUDING, CONSPIRING, CASE FIXING, OBSTRUCTION OF DUE PROCESS AND EQUAL PROTECTION OF THE LAW, HATE CRIMES, OBSTRUCTION OF JUSTICE, CORRUPTION." In her prayer for relief under the Complaint, the Debtor requested that the District Court investigate the allegations of the Complaint; a trial by jury be held; and, among other things, an order of protection of her person and property be entered, and the wrongdoers be prosecuted by the law.
16. By Order entered February 19, 2004, Chief Judge Joe Billy McDade summarily dismissed both the Debtor's Complaint and the Emergency Motion Ex Parte for Protection/Intervention, finding that the United States District Court lacked subject matter jurisdiction over the matters raised in both pleadings.
17. On March 3, 2004, this Court rescheduled the Trustee's Motion for Dismissal, the two Motions to Dismiss filed by Creditors, R. Victor Hanks and Genevieve M. Hanks, and the Objection to Trustee's Motion for Dismissal filed by the Debtor for a hearing to be held on March 24, 2004, at 8:30 a.m., by telephone conference call. Written notice of this hearing was sent to the necessary parties.
18. Late in the afternoon of March 23, 2004, the Debtor telefaxed an unfiled pleading to this Judge's Chambers entitled "Emergency Ex Parte Motion Requesting Judge Fines to Disqualify Himself for Cause."
19. On March 24, 2004, a hearing was held on all of the matters captioned above and all matters were taken under advisement at the conclusion of that hearing.
Conclusions of Law
At the outset, the Court would note that, in examining the Debtor's Emergency Ex Parte Motion Requesting Judge Fines to Disqualify Himself for Cause telefaxed to Chambers on March 23, 2004, it can find no basis in law or fact to allow said request. The Debtor was informed at the commencement of hearing on March 24, 2004, that the request for recusal was denied, and that this Judge would continue to preside over her case and rule on the matters presently pending.
Pursuant to 11 U.S.C. § 1307(c) and 11 U.S.C. § 1325, the Court may dismiss a case under Chapter 13 for cause, including lack of good faith on the part of the debtor. A finding that a Chapter 13 petition was filed with lack of good faith requires a fact intensive inquiry to be determined by looking at the totality of the circumstances. See: In re Love, 957 F.2d 1350 (7th Cir. 1992). Where it is found that a debtor has made serial bankruptcy filings, dismissal of a Chapter 13 bankruptcy is appropriate with a bar to refiling subsequent bankruptcies for a reasonable period of time. See: In re Jackson, 51 F.3d 275 (7th Cir. 1994); In re Jackson, 62 F.3d 1419 (7th Cir. 1994); and In re Casse, 198 F.3d 327 (2nd Cir. 1999).
Pursuant to the provisions of 11 U.S.C. § 349, 11 U.S.C. § 109(g), and 11 U.S.C. § 105, the Court may dismiss a case with prejudice to refiling for an appropriate period of time. In fact, the purpose of § 109(g) of the Code is to provide the Court with greater authority to control abusive multiple filings. Under § 109(g), the Court may dismiss a bankruptcy petition with a bar to refiling any bankruptcy petition for a period of 180 days or longer, should the Court deem it necessary.See: In re Casse. supra, at 339.
In the instant case, the Court must find that the Debtor has filed her petition under Chapter 13 in bad faith. An examination of the petition and of the Debtor's proposed Chapter 13 Plan reveals that the petition and schedules are incomplete, and creditors are not properly identified and categorized as required by the Bankruptcy Code.
An examination of the Debtor's Chapter 13 Plan filed on July 8, 2003, reveals numerous provisions not acceptable under the Bankruptcy Code, nor appropriate under any existing law. The Plan proposes payments for a period of 24 months or less; a term which is not acceptable unless all creditors would be paid in full in that time. The Plan as proposed could not possibly pay all creditors in full within a period of 24 months or less. Additionally, the Plan contains provisions that have no place in a Chapter 13 Plan. For example, paragraph 5 of the Debtor's Chapter 13 Plan states: "The Trustee (provided it is a trustee with no conflicts of interest in this case) . . ." Such a provision is not appropriate and shows a lack of good faith. Additionally, the Debtor states at paragraph 14:
That Genevieve Hanks is 93 years of age, is incompetent, does not possess the mental capability to file suit on her own behalf, and through information and belief, Debtor believes she needs a guardian, at arms length, appointed to protect her from possible on-going neglect and exploitation.
Here again, this provision has no place in a Chapter 13 plan, and shows the Debtor's lack of good faith.
In addition to the inaccuracies in her petition and schedules and the prohibitive provisions in Debtor's Chapter 13 Plan, the Debtor has shown a complete lack of good faith in her refusal to answer questions at a § 341 Meeting of Creditors. The Debtor's assertion of the Fifth Amendment privilege against self-incrimination was inappropriate and not available to the Debtor where she voluntarily sought the jurisdiction of this Court and the relief afforded under Chapter 13 of the Bankruptcy Code. See: Galante vs. Steel City Nat'l. Bank of Chicago, 384 N.E.2d 57 (1st Dist. Ill. 1978);Lyons v. Johnson, 415 F.2d 540 (9th Cir. 1969); andBramble v. Kleindienst, 357 F. Supp. 1028 (Dist.Ct. Colo. 1973).
The Debtor's lack of good faith is further evidenced by her failure to appear at a continued § 341 Meeting of Creditors which the Court scheduled for February 19, 2004, after an indication from the Debtor, on February 13, 2004, that she would appear at a continued
§ 341 Meeting of Creditors and answer questions by the Chapter 13 Trustee and creditors. The Court finds that the Debtor has engaged in delay tactics which are evidenced by her disingenuous motion to continue the § 341 Meeting of Creditors scheduled for February 19, 2004, wherein she states that one of the main reasons for her inability to appear was due to a very serious surgery that her sister was having in Wisconsin on that morning. While it is very possible that the Debtor's sister may have been having surgery in Wisconsin on the morning of February 19, 2004, the evidence is clear that the Debtor was, at least initially, in Rock Island, Illinois, filing pleadings with the United States District Court. A review of the Debtor's Emergency Motion to continue the § 341 Meeting of Creditors scheduled for February 19, 2004, reveals other matters which, in no way, form a valid basis for granting such a continuance. Furthermore, the Emergency Motion was not filed in a timely manner, and it is apparent from the circumstances that the Debtor had no intention of appearing at the continued § 341 Meeting of Creditors. The Debtor's lack of good faith is also evidenced by her eleventh hour filing of a Motion requesting that this Judge recuse himself prior to the hearing scheduled on March 24, 2004. That Motion contained no valid argument in law or in fact for said recusal. While the Motion recites that it is not filed for the purpose of delay, the Court finds that there could have been no other justification for the Motion other than delay.
In ruling on the matters before it, the Court has carefully reviewed the history of Debtor's bankruptcy filings prior to the instant case, and has reviewed the entire record of the instant case. The Court has carefully read each of Debtor's pleadings and can find no valid basis to support the many different forms of relief which she has requested. Given the record of the instant proceeding and the history of the Debtor's multiple filings, the Court finds that the instant bankruptcy proceeding should be dismissed with prejudice, and that the Debtor should be barred from refiling bankruptcy under any Chapter of the Code for a period of 180 days from the date of this Order.
Given that Debtor's case is to be dismissed; Debtor's Request for Order from the Court, which was filed on February 17, 2004, is moot. Under the Federal Rules of Bankruptcy Procedure, all monies paid by the Debtor to the Chapter 13 Trustee will be refunded to her at the earliest possible moment.
ORDER
For the reasons set forth in an Opinion entered on the 6th day of April 2004;
IT IS HEREBY ORDERED that:
A. The Trustee's Motion for Dismissal filed July 11, 2003, isALLOWED:
B. The Motion to Dismiss filed by Creditors, R. Victor Hanks and Genevieve M. Hanks, on October 20, 2003, is ALLOWED:
C. The Second Motion to Dismiss filed by Creditors, R. Victor Hanks and Genevieve M. Hanks, on November 10, 2003, is ALLOWED:
D. The Debtor's Request for Order from the Court filed by the Debtor on February 17, 2004, is MOOT:
E. The Debtor's Emergency Ex Parte Motion Requesting Judge Fines to Disqualify Himself for Cause is DENIED:
F. Debtor's Chapter 13 bankruptcy petition filed in the above-captioned case, on June 20, 2003, is DISMISSED with prejudice; and,
G. The Debtor, Donna J. Ericson, is barred from refiling bankruptcy in any Federal Districtunder any Chapter of the Bankruptcy Code for a period of 180 days from the date of this Order.