Opinion
21-10011
02-09-2022
In Re DWIGHT EARL JONES Debtor
Chapter 7
DECISION PURSUANT TO THE UNITED STATES TRUSTEE'S MOTION TO DISMISS [DOCKET NUMBER 45] AND THIS COURT'S ORDER TO SHOW CAUSE [DOCKET NUMBER 30] DISMISSING DEBTOR'S BANKRUPTCY CASE WITH A THREE-YEAR BAR TO RE-FILING
Beth A. Buchanan United States Bankruptcy Judge
This matter is before this Court, sua sponte, on its Order to Show Cause Why Case Should Not Be Dismissed and Referred to the U.S. Attorney for Violation of 18 U.S.C. § 152 [Docket Number 30] ("Show Cause Order") and on the Motion of the United States Trustee to Dismiss Chapter 7 Case with Request for Three Year Bar to Re-filing [Docket Number 45] ("Motion to Dismiss").
This Court entered its Show Cause Order following its review of filings by Debtor Dwight Earl Jones ("Debtor") in his sixth bankruptcy case. Included in the Debtor's filings was a proof of claim with attached IRS forms falsely claiming members of this Court and the chapter 13 trustee were "borrowers" who owed the Debtor funds. Following the Debtor's conversion of this case from chapter 13 to one under chapter 7 and an adjournment of the hearing on the Show Cause Order, the United States Trustee ("UST") filed a Motion to Dismiss requesting dismissal of the Debtor's case for a lack of good faith pursuant to the provisions of 11 U.S.C. § 707(a) and requesting a three-year bar to re-filing pursuant to 11 U.S.C. § 349(a). A hearing on this Court's Show Cause Order and the UST's Motion to Dismiss was held on September 14, 2021. Upon a review of the exhibits and filings, and the testimony of the witnesses at the hearing, this Court grants the UST's Motion and determines that dismissal of this bankruptcy case with a three-year bar to re-filing is warranted.
The filings considered include Debtor Dwight Earl Jones's documents filed in support of his position including: the Application Notice to Deny Motion to Dismiss in Cause Number 1:21-bk-10011 Hearsay and Presumptions [Docket Number 85]; the Application Notice to Set Aside and Vacate Order to Show Cause Number 1:21-bk-10011 [Docket Number 86]; the Man Dwight-Earl: Jones Embassador of God Special Occupant, Executor Beneficiary, Heir of the Legal Estate Dwight Earl Jones in Cestui Que Use Application Notice to Strike Objection of the United States Trustee to Debtor's Application Notice and Instruction to Strike Objection to Notice to Comply By Benjamin A Sales it Does Not Apply in Cause 1:21-bk-10011 Docket No. 96) Filed on October 27, 2021 for the Holy Bible in Equity is Law a all Objection Not Under Oath, With Filiers Bond File on the Court Record Does Not Apply and Dwight-Earl: Jones Does Not Consent to any Order of the Court on Motion to Dismiss by United States Trustee's Office and Requires a Trial by Jury on any Motion to Dismiss Cause Number 1:21-bk-10011 in United States Bankruptcy Court Southern District of Ohio [Docket Number 104]; and, his Affidavit of Truth [Docket Number 113].
I. FACTUAL AND PROCEDURAL BACKGROUND
A. The Debtor's Multiple Bankruptcy Filings
On January 5, 2021, the Debtor filed his current bankruptcy case, which is his sixth bankruptcy case filed in the Southern District of Ohio since June of 2012. All five prior cases, one of which was filed jointly with his wife, Derryn Nicole Jones, were dismissed without discharge. A summary of the Debtor's cases and their dismissals, is as follows:
1. Case No.12-13483, a joint chapter 13 of the Debtor and Derryn Nicole Jones was filed on June 26, 2012. On August 8, 2012, an order of dismissal was entered stating that the case was dismissed for failure to file documents;
2. Case No. 13-11966, a chapter 13 case of the Debtor individually, was filed on April 24, 2013. On August 13, 2013, an order of dismissal was entered stating that the case was dismissed for failure to make plan payments; 3. Case No. 16-12757, a chapter 13 case of the Debtor individually, was filed on July 26, 2016. On October 26, 2016, an order of dismissal was entered stating that the case was dismissed for willful failure of the debtor to abide by orders of the court and to appear before the court in proper prosecution of the case. The order included a bar to re-filing for a period of 180 days under 11 U.S.C. § 349(a), § 109 and § 105; 4. Case No. 17-11687, a chapter 7 case of the Debtor individually, was filed on May 8, 2017. On September 27, 2017, an order of dismissal was entered granting the trustee's motion to dismiss for failure to provide the trustee information to conduct a 341 meeting. The Debtor appealed an order overruling his motion to vacate the dismissal and the District Court affirmed the bankruptcy court's order on November 19, 2019; 5. Case No. 19-13673, a chapter 13 case of the Debtor individually, was filed October 7, 2019. On December 9, 2019, an order of dismissal was entered granting the trustee's motion to dismiss for failure to make plan payments; and 6. The current case: Case No. 21-10011, a chapter 13 case of the Debtor individually, was filed on January 5, 2021.[Docket Number 66, UST Ex. 1, ¶¶ 1-10].
The UST requests that this Court take judicial notice of the facts listed in UST Exhibit 1, which are established through the existence of documents filed of record in the Debtor's bankruptcy cases filed in this district as described in docket summaries attached to the exhibit. Pursuant to Federal Rule of Evidence 201, this Court concludes that the existence of these documents, and what they say, are of public record and cannot reasonably be questioned and, accordingly, takes judicial notice of them. See Hancock v. Miller, 852 Fed.Appx. 914, 918-19 (6th Cir. 2021) (noting that a court may take judicial notice of court filings of public record, and what they say, but not to establish the truth of the matter asserted with respect to disputed facts); Webb Mtn., LLC v. Exec. Realty P'ship, L.P. (In re Webb Mtn., LLC), 414 B.R. 308, 319 (Bankr.E.D.Tenn. 2009). Similarly, this Court takes judicial notice of the docket in the Debtor's current bankruptcy case in this Court. ZMC Pharmacy, LLC v. State Farm Mut. Auto. Ins. Co., 307 F.Supp.3d 661, 665 n.1 (E.D. Mich. 2018) (noting that a court may take judicial notice of its own docket); Baccala Realty, Inc. v. Fink (In re Fink), 351 B.R. 511, 517 n.1 (Bankr. N.D.Ill. 2006) (holding that a court make take judicial notice of the record in its own cases).
B. The Debtor's 2019 Bankruptcy Case
The Debtor's most recently filed case prior to the current one, Case No. 19-13673 ("the 2019 Bankruptcy Case"), was filed on October 7, 2019 and dismissed by this Court on December 9, 2019 for failure of the Debtor to make plan payments [Docket Number 66, UST Ex. 1, ¶ 8 and n.16; Case No. 19-13673, Docket Number 36]. Following dismissal, the Debtor filed three documents treated by the Court as motions for reconsideration [Id., UST Ex. 1, ¶ 9 and n.17, 19 and 23; Case No. 19-13673, Docket Numbers 40, 43 and 53]. All three motions were denied. [Id., UST Ex. 1, ¶ 9, n. 18, 20, and 24; Case No. 19-13673, Docket Number 41 and 46 (amending 41), 45 and 54]. In denying the final motion for reconsideration, this Court noted that the chapter 13 plan filed by the Debtor in that case did not appear to acknowledge the need to make chapter 13 plan payments to the chapter 13 trustee and, instead, "seems to suggest that the Trustee and/or the court, as his fiduciaries, has the obligation to make arrangements to pay his creditors" [Case No. 19-13673, Docket Number 54, p. 9]. This Court noted that the Debtor's chapter 13 plan as well as some of his other filings suggested that the Debtor believed a legal theory with similarities to a "Redemptionist" theory, the theory that there is a fund created for everyone at birth and that there is a procedure to "redeem" or reclaim this fund to pay bills. [Id., pp. 10-11]. The order notes that courts have routinely rejected the Redemptionist theory and similar theories as frivolous and a waste of judicial resources and this Court agreed [Id., p.11]. The order stated that because the Debtor lacked the cash flow to fund his chapter 13 plan and because the Debtor's "redemptionist-like alternative" for funding the plan lacked merit, his motion to reconsider was denied and the case remained dismissed for failure to make plan payments [Id.].
C. The Debtor's Current Bankruptcy Case
The Debtor commenced his current bankruptcy case, Case Number 21-10011, by filing a voluntary chapter 13 petition on January 5, 2021. On January 19, 2021, the Debtor filed his schedules including Official Form 106Sum, summarizing his assets and liabilities [Case No. 21-10011, Docket Number 66, UST Ex. 3, p. 1]. On the summary, he listed no liabilities and, instead stated only that they are "prepaid" [Id.]. He also listed "prepaid" on the form's line requesting his current monthly income [Id., p. 2] as well as on line 23(c) of Schedule J requesting his monthly net income [Id., p. 33]. On line 24 of Schedule J he noted that, pursuant to "Title 50 Section 4305," he needs "the bankruptcy court to pay Dwight Earl Jones $10,500 U.S. currency per week for living cost from Bond Number 112-1961-0042927" [Id. (capitalization modified from original)]. Similarly, the Debtor noted that he "expects additional $504,000 from bond 112-1961-0042927" on his Statement of Current Monthly Income under line 15(b) [Id., p. 36].
The Debtor also filed his chapter 13 plan on January 19, 2021 [Docket Number 20; Docket Number 66, UST Ex. 1, ¶ 11]. The chapter 13 plan was filed under the wrong name and the Debtor left blank the amount of his monthly plan payment to be disbursed to creditors. Instead, the Debtor listed himself as a "Priority Creditor" to receive a monthly payment of $42,000.00.
Although the Debtor's original chapter 13 plan was not admitted as an exhibit at the hearing, the plan was listed as a basis for this Court's Show Cause Order [Docket Number 30] and was discussed by the Debtor in his testimony [Docket Number 122, Transcript of September 14, 2021 Hearing ("Tr."), pp. 120-21, 162-63]. As indicated at the hearing [Tr. p. 174], this Court will take judicial notice of the original chapter 13 plan filed by the Debtor of record in this bankruptcy case.
In addition, on March 1, 2021, the Debtor filed a proof of claim listing himself as a creditor in his own bankruptcy case owed $9,999,999,999.00 [Docket Number 66, UST Ex. 9]. The basis for this claim was listed as "the return of withheld equitable interest, rents, proceeds and more." The Debtor attached to the proof of claim three IRS Tax Forms 1099-A on which he wrote that he is a lender with a balance of $9,999,999,999.00 owed by three "borrowers." The three borrowers named on the forms include this bankruptcy judge, the Bankruptcy Clerk of Court for the Southern District of Ohio and the chapter 13 trustee in Cincinnati. In an area of the proof of claim form to provide a basis for perfection of the claim, the Debtor cites two sections of the United States Code: "12 us code 95a-95a(2) / title 50 us code 4305(b)(2)" [Id.].
After the filing of the Debtor's proof of claim and his chapter 13 plan, this Court entered its Show Cause Order on April 8, 2021 noting its concern with the following irregularities in the Debtor's filings:
The chapter 13 plan filed by the Debtor includes the wrong debtor name in the caption, and was not served on creditors as required by Local Bankruptcy Rule 3015-1(b). In addition, the plan does not propose paying creditors from the Debtor's future income as contemplated by the Bankruptcy Code['s] chapter 13 provisions. See 11 U.S.C. § 1322(a)(1). Instead, the Debtor lists himself as a priority creditor in his own bankruptcy case to receive $42,000 as a monthly payment. The Debtor also filed a proof of claim, signed under penalty of perjury, in which he claims to be owed $9,999,999,999.00 in his bankruptcy case as "the return of withheld equitable interest, rents, proceeds and more." In an attachment to the proof of claim, he lists himself as a lender of these funds with "borrowers" that include members of this Court and the chapter 13 trustee.[Docket Number 30]. The Show Cause Order states that: "the Debtor may be committing an abuse of the bankruptcy process by continuing a pattern of legally and factually meritless filings under a 'redemptionist theory' of recovering funds, a theory that was rejected by this Court in one of the Debtor's prior bankruptcy cases (Bankruptcy Case Number 19-13673, Docket Number 54, pp. 9-11)" [Id.]. Pursuant to the Show Cause Order, a hearing was scheduled for April 15, 2021 and a request was made for a representative of the UST to attend [Id.].
On April 14, 2021, the day before the scheduled hearing, the Debtor filed a notice to convert the chapter 13 proceeding to one under chapter 7 [Docket Number 32]. The hearing on this Court's Show Cause Order was adjourned [Docket Number 40] and, subsequently, the UST filed its Motion to Dismiss asserting that the Debtor's chapter 7 case should be dismissed for lack of good faith and further requesting a three-year bar to re-filing [Docket Number 45].
A combined hearing on this Court's Show Cause Order and the UST's Motion to Dismiss was scheduled for September 14, 2021. A week before the scheduled hearing, the Debtor filed amended schedules and an amended chapter 13 plan even though he had previously converted the case to chapter 7 [Docket Numbers 69 and 72]. Subsequently, a day before the scheduled hearing, the Debtor amended his proof of claim by deleting the dollar amount of the claim and removing the tax forms that had been attached and, instead, attaching his birth certificate [Proof of Claim No. 4-2].
At the hearing, both the Chapter 7 Trustee, Mark Greenberger ("Trustee"), and the Debtor testified as witnesses. The Trustee discussed irregularities in the Debtor's originally filed schedules and compared them to the new schedules filed by the Debtor a week before the hearing [Docket Number 122, Transcript of September 14, 2021 Hearing ("Tr."), pp. 51-70]. The Trustee noted that, in the original schedules, the Debtor did not include any debts or liabilities instead noting that they were "prepaid" [Tr., p. 52]. He noted that, in the area of the schedules for listing assets such as bonds, mutual funds and publicly traded stocks that a debtor may own, the Debtor listed "Certificate of live birth" [Tr. p. 54]. The Debtor also stated on his schedules that the bankruptcy court needed to pay the Debtor $10,500 per week [Tr. p. 59].
The Trustee further discussed the Debtor's new schedules filed a week before the hearing after his conversion to chapter 7 and how they differed from the original schedules. The Trustee noted that the value of the Debtor's real property changed and that the schedules indicated a new vehicle that was not listed in the original schedules [Tr., pp. 62-63]. The Debtor still listed, in the area for bonds, mutual funds and publicly traded stocks, that he has a "Birth certificate with state file number 112-1961, and then some Xs, which has a CUSIP number, a Social Security number connected to Dwight Earl Jones which has a CUSIP number" [Tr. pp. 63-64]. The Trustee noted many other changes of varying significance, including checking accounts listed, creditors listed, the amount of expenses in Schedule J, and the Debtor's income amount [Tr., pp. 63, 65-69].
The Trustee's testimony turned to a document he received from the Debtor called a "Notice Concerning Fiduciary," which appeared to be the Debtor's attempt to appoint the Trustee as his fiduciary [Tr. p. 79-82; Docket Number 73, Debtor Ex. 10]. The Trustee testified that he was not sure why the Debtor filled-out the form nor did the Trustee authorize this appointment. From this document and an Application Letter Rogatory also received from the Debtor, the Trustee stated his belief that the Debtor was attempting to appoint the Trustee as a fiduciary to conduct activities outside his normal activities including collecting funds for the Debtor and notifying him when they have been collected so that they may be deposited in a Fifth Third Bank account [Tr. p. 82-83]. The Trustee noted that this is not something a trustee in bankruptcy would do [Tr. p. 83].
Following the Trustee's testimony, the Debtor testified to explain his actions and filings [Tr. pp. 119-151]. He stated that he is part of an unincorporated association with somewhere between five and fifteen members in the Cincinnati area, including Curtis Mapp, the member who gave him a copy of a chapter 13 plan [Tr. pp. 119-121]. The erroneous name on the chapter 13 plan is the name of the member who gave him a copy of the chapter 13 plan [Id.]. When asked why he listed himself as a priority creditor in his chapter 13 plan owed a monthly payment of $42,000, the Debtor stated that he talked to the IRS who told him that he would get $504,000 in tax credits in Publication 1212 and he was not sure if the Trustee might be able to sue for it [Tr. pp. 162-63]. He noted he would be willing to take it off if it was not true [Id.].
The Debtor testified to calling several brokers over recent years who told him that his social security number and birth certificate have "CUSIP" numbers attached to them [Tr. pp. 122-24]. The brokers told him that the CUSIP numbers have value and could be traded on the stock exchange [Id.]. However, he testified that the brokers would not tell him how they were traded without talking to the brokers face-to-face, attending a class, or paying them $10,000.00 [Id.]. For that reason, he listed the social security number and birth certificates with CUSIP numbers as assets but did not put a value [Id. p. 124]. While testifying to his belief that that his birth certificate had value that it could pay, he stated that his belief may be wrong and that he was waiting to discuss the issue with the Trustee [Tr., pp. 145-46].
The Debtor testified to what he described as the Dwight Jones Estate Trust, expressed in Debtor Exhibit 6, a blank sheet of paper with hand-written words stating "Express Trust Case 1:21-bk10011 by dwight-earl:" [Docket Number 73, Debtor Ex. 6; Tr. p. 125]. He said the exhibit was "telling the Court that this trust has beneficiaries and heirs and, therefore, every securities intermediary and custodian and fiduciary that touches these accounts must take care of the beneficiaries and heirs to the Dwight Jones Estate" [Tr. p. 125]. He testified that it is a "sealed trust" and "for everyone to know not to breach the trust and violate the trust. And everyone that breaches the trust or violated the trust shall be held accountable for $1 million" [Tr. p. 126]. Subsequently the Debtor testified that he will "appoint under the Power of Appointment Act as custodians and securities intermediary Benjamin Sales, Judge Beth A Buchanan and Trustee Mark Alan Greenberger." [Tr. p. 161].
Benjamin Sales is the attorney representing the United States Trustee in this matter.
In addition, the Debtor explained why new schedules filed after he converted to chapter 7 included different information than his original schedules. He explained that he just bought a new vehicle, a 2007 Saab, for $1,000 [Tr. p. 130]. He explained that the values for his bank and checking accounts were left blank because a bank account is just a promise to pay and has no value and, if it is wrong, then he will fix it once he talks to the Trustee at or after the 341 meeting [Tr. pp. 140-41]. He explained a request for a homestead exemption in two properties on Schedule C by noting that he believed he could have an exemption in his own home as well as one for his son [Tr. p. 142]. He further explained discrepancies in the new schedules compared to the original ones based on changes in the value of his real property [Id.], changes in employment income [Tr. p. 144], and that expenses change all the time [Tr. p. 145].
Following the Debtor's conversion of the case to chapter 7, the Trustee did not hold the 341 meeting. Initially, the 341 meeting was rescheduled to June 3, 2021 based on the Debtor's request for a continuance [Tr. pp. 76-77]. The Trustee noted to the Debtor that he would not hold the 341 meeting on June 3 until the required paperwork that was supposed to be mailed to the Trustee was received from the Debtor [Tr. p. 77]. Subsequently, on June 2, 2021, the day before the rescheduled 341 meeting, the Debtor called the Trustee to drop off the paperwork at the Trustee's office [Id.]. The Trustee told the Debtor not to drop off the paperwork because of COVID-19 concerns and because the Trustee was not going to hold the 341 meeting until after the UST's motion to dismiss was heard [Id.]. Unfortunately, the delays in holding the 341 meeting caused confusion regarding whether or not the Debtor should deliver documents to the Trustee needed for the 341 meeting. The Debtor dropped off some documents to the Trustee on September 13, 2021, the day before the scheduled hearing [Tr. p. 78]. The Trustee noted that the documents dropped off were not complete in that deeds, mortgages, and the trust documents referred to by the Debtor, remained undelivered [Tr. p. 79].
He discussed the proof of claim that he filed in his own case and why he put $9,999,999,999.00 on the 1099-A forms for this judge, the clerk of courts, and chapter 13 trustee [Tr. p. 136]. He testified that he called people at the IRS who told him to put all "9's" on a form to indicate "full amount" when you don't know the value [Id.]. He further stated that he did not send it to anybody so no one is liable and it has "just faded" [Tr. p. 137]. He noted that he amended the proof of claim form and so he feels it is corrected [Tr. p. 139].
During the hearing, the Debtor acknowledged that he is not a lawyer and that his schedules and other filings may contain errors [Tr. p. 150]. He stated his belief that the way to fix the problems was for the Trustee to sit down with him and tell him what to fix [Tr. p. 146]. The Debtor further testified to his belief that he has a right to file a bankruptcy and a Constitutional right to start anew [Tr. pp. 148-49]. He explained that he has an inability to pay and has a bond that pays and that the Bible says that every seven years, all debts are to be forgiven [Tr. p. 150]. He asserted that his filing is in good faith and that it may take four or five tries, but, like his wife, he wants a discharge [Tr. p. 151].
After the parties' testimony with respect to the UST's Motion to Dismiss, this Court asked the Debtor to address the issues raised in the Show Cause Order, including whether the case should be dismissed and whether the matter should be referred to the United States Attorney for violation of 18 U.S.C. § 152. This Court noted areas of concern, including an adversary complaint filed by the Debtor that looked like he was intending to re-litigate issues decided in another court about real property that was no longer in the Debtor's name [Tr. p. 168] and that it appeared he was raising unacceptable legal theories in this case that had been raised in prior cases noting that, at some point, this repetition is no longer a misunderstanding [Tr. p. 170]. This Court asked if the Debtor would be willing to reject those theories and proceed towards a discharge of debts based on acceptable bankruptcy theories [Tr. p. 171]. The Debtor responded requesting that this Court send him what are acceptable bankruptcy theories [Id.]. When this Court raised the issue of his continued filing of erroneous documents such as the IRS forms that he filed containing inaccurate information which could cause problems for the people named in them [Tr. p. 171], the Debtor stated that if this Court could send him an explanation in writing "under Proof of Claim" what he can and cannot do, then he would stop [Tr. p. 172-73].
The adversary complaint was filed by the Debtor in Dwight Earl Jones v. Special Loan Servicing et, al., Adversary Proceeding Number 21-1014.
II. LEGAL ANALYSIS
Bankruptcy Code Section 707(a) permits bankruptcy courts to dismiss a bankruptcy case "for cause." 11 U.S.C. § 707(a). In the Sixth Circuit, "cause" includes dismissal of a chapter 7 bankruptcy case that is deemed to be filed in bad faith. Merritt v. Franklin Bank, N.A. (In re Merritt), 211 F.3d 1269 (Table), 2000 U.S. App. LEXIS 6877, at *5, 2000 WL 420681, at *2 (6th Cir. April 12, 2000); Indus. Ins. Servs., Inc. v. Zick (In re Zick), 931 F.2d 1124, 1126-27 (6th Cir. 1991); In re Johnson, 546 B.R. 83, 156 (Bankr. S.D. Ohio 2016); In re McVicker, 546 B.R. 46, 50-51 (Bankr.N.D.Ohio 2016).
Bad faith dismissals should not be taken lightly and should be carefully confined to egregious cases keeping in mind that § 707(a) is geared toward maintaining the integrity of the bankruptcy process. See Zick, 931 F.2d at 1129; Riddle v. Greenberger (In re Riddle), 2020 Bankr. LEXIS 1695, at *18, 2020 WL 3498438, at *7 (B.A.P. 6th Cir. June 29, 2020) (noting that § 707(a) also "works to serve the principle that bankruptcy relief should be limited to the honest but unfortunate debtor"). The moving party, which in this case is the UST, bears the burden of proving cause for dismissal under § 707(a). McVicker, 546 B.R. at 51.
"'The facts required to mandate dismissal based upon a lack of good faith are as varied as the number of cases.'" Zick, 931 F.2d at 1127 (further citation omitted). In determining whether a case warrants dismissal for bad faith, courts consider multiple factors. Id. at 1127-28 (noting that the Sixth Circuit approves of bankruptcy courts implementing a "smell test" and setting forth the factors relied upon to support a determination of a lack of good faith); Johnson, 546 B.R. at 157. Relevant to this case, such factors include:
(1) multiple bankruptcy filings or other procedural "gymnastics;"
(2) a failure of the debtor to make candid and full disclosures;
(3) concealed or misrepresented assets and/or sources of income;
(4) a failure of the debtor to make an effort to repay his debts;
(5) a pattern to evade a single major creditor or judgment;
(6) the over-utilization of the protection of the Bankruptcy Code to the unconscionable detriment of creditors;
and,
(7) other conduct or motives evidencing an abuse of the protections of the Bankruptcy Code.See Zick, 931 F.3d at 1129; Riddle, 2020 Bankr. LEXIS 1695, at *18-19, 2020 WL 3498438 at *7-8; In re Stump, 280 B.R. 208, 214 n.2 (Bankr. S.D. Ohio 2002); In re Spagnolia, 199 B.R. 362, 365 (Bankr. W.D. Ky. 1995). "Although one factor by itself is rarely sufficient to support dismissal under § 707(a), a combination of the factors justifies a 'for cause' dismissal." Riddle, 2020 Bankr. LEXIS 1695, at *19, 2020 WL 3498438 at *8.
When particularly egregious facts are demonstrated, other sanctions may be imposed, including barring a debtor from future filings for a finite or indefinite period of time. See 11 U.S.C. § 349(a); Dietrich v. Nob-Hill Stadium Props., 2007 U.S. App. LEXIS 3591, at *14-15, 2007 WL 579547, at *5 (6th Cir. Feb. 15, 2007) (concluding that "the plain language of section 349(a) appears to allow a bankruptcy court to dismiss a bankruptcy petition with prejudice, permanently, if there is sufficient cause"); Riddle, 2020 Bankr. LEXIS 1695, at *29-32, 2020 WL 3498438, at *11-13 (upholding dismissal of serial filer's case with a three-year bar to re-filing of a debtor who continued to fail to disclose all assets and liabilities after several warnings and opportunities and had filed the petition for an improper purpose); In re Wilcoxon, 2018 Bankr. LEXIS 3616, at *7-8, 2018 WL 6016540, at *3 (Bankr.N.D.Ohio Nov. 15, 2018) (barring re-filing for a period of five years based on the debtor's pattern of serial filings to frustrate creditors while ignoring his responsibilities to pay filing fees and complete credit counseling); In re Grischkan, 320 B.R. 654, 659-61 (Bankr.N.D.Ohio 2005) (dismissing a case and barring debtor from re-filing for 180 days based on the debtor's bad faith in filing four bankruptcy cases in three years with the purpose to thwart a lender's legitimate attempts to foreclose on a house he and his wife continued to live in without making any attempts at repayment of the mortgage loan); Stump, 280 B.R. at 214-17 (dismissing a case and barring the debtors from re-filing for two years based on the debtors' bad faith conduct in shielding assets from creditors while continuing to live a lavish lifestyle and take numerous vacations); In re McCoy, 237 B.R. 419, 422-23 (Bankr. S.D. Ohio 1999) (dismissing the eighth bankruptcy case filed within eight years with a permanent bar to re-filing based on the debtor's failure to file requisite documents in all but one of the cases, failure to attend 341 meetings, failure to accurately disclose prior bankruptcies, and for filing using different names and social security numbers, all in an abusive effort to delay foreclosure and collection from creditors).
Turning to the facts of this case, this Court concludes that the Debtor's filings and actions have been nothing short of egregious and they support the UST's request to dismiss the case for bad faith with a three-year bar to re-filing. The Debtor has filed six bankruptcy cases since 2012 including the current one. All five of the Debtor's prior cases have been dismissed without discharge for the Debtor's failure to follow court orders or fulfill obligations under the Bankruptcy Code.
The current and pending sixth bankruptcy case was initiated by the Debtor's filing of a petition under chapter 13; however, the Debtor's filings reveal that he had no intention of paying his creditors from his net monthly income, as would be required in a chapter 13 case. See 11 U.S.C. §§ 1322(a) and 1326(a). Instead, his filings indicate that he expected funds from a bond, members of this Court, and/or the chapter 13 trustee to pay the Debtor money. Specifically, in his originally filed schedules, the Debtor failed to list the total amount of his liabilities, instead describing them as "prepaid" [Docket Number 66, UST Ex. 3, p. 1] and further indicated on his Schedule J that "I need the Bankruptcy Court to pay Dwight Earl Jones $10,5000 U.S. Currency per week for living costs from Bond Number 112-1961-0042927" [Id., p. 33] and on his Statement of Current Monthly income that he "expects additional $504,000 from bond 112-1961-0042927" [Id., p. 36].
Furthermore, the original chapter 13 plan filed by the Debtor failed to provide for payment to creditors from the Debtor's monthly income [Docket Number 20]. Instead, the Debtor listed himself as a "Priority Creditor" to receive a monthly payment of $42,000.00.
Even more concerning to this Court was the proof of claim filed by the Debtor in this case, and signed by the Debtor under penalty of perjury, in which he lists himself as a creditor owed money for "the return of withheld equitable interest, rents, proceeds and more" [Docket Number 66, UST Ex. 9]. The Debtor attached IRS tax forms to the proof of claim on which he wrote that he is a lender with a balance of $9,999,999,999.00 owed by three "borrowers." The individuals that the Debtor listed as "borrowers" who allegedly owe him money include this bankruptcy judge, the Bankruptcy Clerk of Court, and the Cincinnati chapter 13 trustee. Although the Debtor cites "12 us code 95a-95a(2) / title 50 us code 4305(b)(2)" as a statutory basis in the claim, the statutes are not bankruptcy laws nor do they provide a basis for the Debtor to be a creditor in his own bankruptcy case nor list members of this Court or a chapter 13 trustee as borrowers who owe him funds. At the hearing, the Debtor testified to his belief that $9,999,999,999.00 was what unidentified IRS workers told him to put on the forms to indicate "full value" when he did not know the proper amount. Regardless of the amount, the implication is clear: the Debtor filed forms falsely stating that members of this Court and the chapter 13 trustee owe him money.
Both statutes cited by the Debtor are duplicative codifications of the Trading with the Enemy Act of 1917 providing for regulating embargoes and trading with the enemy during times of war. See Empresa Cubana del Tabaco v. Culbro Corp., 399 F.3d 462, 465 (2nd Cir. 2005) (noting that 12 U.S.C. § 95(a) is the codification of Section 5(b) of the Trading with the Enemy Act of 1917 and provides the basis for regulations involved in an embargo); Williams v. Ohio Dep't of Medicaid, 2021 U.S. Dist. LEXIS 79224, at * 3-4, 2021 WL 1611615, at *2 (S.D. Ohio Apr. 26, 2021) (noting that 50 U.S.C. § 4305(b)(2) is part of the Trading with the Enemy Act of 1917 which was "passed during World War I, and - as its title implies - addresses war and national defense, specifically trading with the enemy"); United States v. Nobrega, 2019 U.S. Dist. LEXIS 210005, at *18-21, 2019 WL 6619853, at *6-7 (D. Me. Dec. 5, 2019) (same). Neither statute provides a basis for the Debtor's filing of a proof of claim in this bankruptcy case and 12 U.S.C. § 95(a) is no longer valid. Nobrega, 2019 U.S. Dist. LEXIS 210005, at *18, 2019 WL 6619853, at *6.
From these documents, it is apparent that the Debtor continues to assert his theory that he may recover funds in his bankruptcy case, either as a payout from a bond that the Debtor believes may be redeemed or directly from this court or the bankruptcy trustee. This theory is not new to the Debtor; he raised an iteration of it in his prior 2019 bankruptcy case. In that prior case, this Court firmly rejected the Debtor's "redemptionist-like" theory in its order denying his motion to reconsider this Court's dismissal of the case [Case No. 19-13673, Docket Number 54, pp. 9-11 (citing In re Harrison, 390 B.R. 590 (Bankr.N.D.Ohio 2008) and In re Hill, 2015 Bankr. LEXIS 3161, 2015 WL 5575499 (Bankr.E.D.Tenn. Sept. 18, 2015))]. This Court's order put the Debtor on notice that his belief that he was owed money or would be paid money in his bankruptcy case was frivolous and without merit. That the Debtor filed documents in the current case reasserting this meritless theory, including statements in his schedules and plan that he would be paid by the court or through a bond and IRS tax forms falsely identifying individual members of this Court and the chapter 13 trustee as borrowers owing him money, is an egregious abuse of the bankruptcy system and, itself, warrants dismissal of the Debtor's bankruptcy case with a bar to re-filing.
Following this Court's filing of the Show Cause Order first raising its concerns about his chapter 13 schedules, plan, and proof of claim, the Debtor converted his case from chapter 13 to chapter 7 and, a week before the hearing, the Debtor filed new schedules that corrected some of the errors and omissions in the original ones. However, his recent filings coupled with the testimony at the hearing make clear that he has not disavowed himself of his erroneous beliefs and meritless legal theories nor are his filings accurate and complete. Specifically, this Court cites the following:
(1) The day prior to the hearing, the Debtor filed an amended proof of claim that, while omitting the tax forms, continues to assert, under penalty of perjury, that the Debtor, or a trust in his name, is a creditor in his own bankruptcy case [Proof of Claim 4-2].
(2) At the hearing, the Debtor reiterated his belief that he is owed $504,000 in tax credits under Publication 1212 and/or has a bond that pays upon his inability to pay his debts [Tr, pp. 138, 150, 162]; (3) At the hearing, the Debtor testified that a "CUSIP" number is attached to his birth certificate and social security number that has value and that may be traded in some manner based on his discussions with unidentified brokers [Tr. pp. 122-24] and he lists his birth certificate and social security card with a "CUSIP" number in the area of his amended schedules for financial assets such as bonds, mutual funds and publicly traded stocks [Tr. pp. 63-64]; (4) At the hearing, the Trustee testified that, following the conversion to chapter 7, the Debtor sent him documents attempting to appoint the Trustee as a fiduciary to conduct activities outside the normal activities of a trustee in bankruptcy, including collecting funds to be deposited at the Debtor's direction in a Fifth Third account [Tr. pp. 79-83]; and (5) At the hearing, the Debtor defended his right in this bankruptcy case to create an express trust for the benefit of his designated "beneficiaries and heirs" and that every "securities intermediary," "custodian," and "fiduciary" that touches the accounts must not breach the trust or be held accountable for $1 million [Tr. 125-26; Docket Number 73, Debtor Ex. 6]. He testified that he will appoint, under the "Power of Appointment Act, " this judge, the UST and the Trustee as "custodians and securities intermediary" with himself as the "donor and beneficiary of record" [Tr. pp. 161].These recent filings and the testimony at the hearing indicate that the Debtor's conversion to chapter 7 was not the act of an honest but unfortunate debtor attempting to obtain a discharge. Instead, it was nothing more than an attempt to further delay dismissal while, inexplicably, continuing to assert meritless legal theories to be paid money in his own bankruptcy case and to appoint bankruptcy judges and trustees to act on his own behalf.
One publication that the Debtor relies on for his legal theory that he is owed $504,000 is what he describes as Publication 1212 [Tr. pp. 138, 162]. The Debtor did not submit this publication at the hearing. Assuming the Debtor refers to IRS Publication 1212, the publication is not law nor does it stand for the proposition that the Debtor asserts. As described on the IRS's website and in the introduction to the publication, IRS Publication 1212 is a guide to publicly offered original issue discount (OID) debt instruments. The guide is intended to help brokers and other middlemen identify publicly offered OID debt instruments that they may hold as nominees for the true owners so they can file the appropriate tax forms as required and is also intended to help owners determine how much OID to report on income tax returns. See www.irs.gov/forms-pubs/about-publication-1212.
The Debtor refers to the "Power of Appointment Act of 1951" [Tr. p. 35, 161 and 172] for his alleged appointment powers. The Powers of Appointment Act of 1951 is the source of laws governing federal estate and gift taxation of transfers of property by a person holding a power of appointment. John G. Steinkamp, Estate and Gift Taxation of Powers of Appointment Limited by Ascertainable Standards, 79 Marq. L. Rev. 195, 199-202 (Fall 1995). The Debtor fails to explain how this Act gives him authority to appoint bankruptcy judges and trustees as his personal fiduciaries, custodians or "securities intermediary." Like other courts faced with a litigant using this Act in an attempt to appoint a judge as the litigant's fiduciary, this Court finds the attempt "absurd" and without merit. Vongermeten v. Planet Home Lending, LLC, 2019 U.S. Dist. LEXIS 46946, at *38, 2019 WL 1298564, at *13 (E.D. Wis. March 21, 2019) ("The plaintiff's assertion that he is 'appointing' this court as a trustee or fiduciary under the Powers of Appointment Act of 1951 is absurd. This court is the independent, neutral arbiter of disputes between the parties."). Nor may the Debtor appoint a bankruptcy trustee in such a manner. Upon the filing of a bankruptcy petition, a bankruptcy estate is created and the bankruptcy trustee is its legal representative. In re Raynard, 327 B.R. 623, 628 n.9 (Bankr. W.D. Mich. 2005). Accordingly, when a chapter 7 bankruptcy trustee acts, he or she does so as a representative of the bankruptcy estate and not as a representative of a debtor personally or any personal trust the debtor may create. Id.
During the hearing, the Debtor acknowledged that he is not a lawyer and that some of his beliefs may be inaccurate. However, after five failed bankruptcy cases and the Show Cause Order and Motion to Dismiss issued in this sixth bankruptcy case, this Court concludes that the Debtor has had ample notice that he must ensure that his bankruptcy filings are accurate, complete, and with a basis in bankruptcy law. Rather than hire competent counsel or apprise himself of bankruptcy law and procedure, the Debtor continues to file incomplete and inaccurate documents based on meritless and rejected legal theories and make continued attempts to appoint bankruptcy trustees and this judge as his personal fiduciaries. His repetition "strengthens the inference that the conduct [is] deliberate" and supports a determination that the Debtor does not take his responsibilities under the Bankruptcy Code seriously. Wilcoxon, 2018 Bankr. LEXIS 3616, at *7, 2018 WL 6016540, at *3.
This Court concludes that neither the Debtor's original filings under chapter 13 nor his conversion to chapter 7 were acts of good faith. Accordingly, dismissal of this case is warranted pursuant to 11 U.S.C. § 707(a). Furthermore, considering the Debtor's multiple bankruptcy cases dismissed without discharge for failure to follow court orders or fulfill obligations under the Bankruptcy Code, the serious and spurious nature of documents that the Debtor filed in his current case including tax forms falsely naming members of this court and the chapter 13 trustee as borrowers owing the Debtor funds, the Debtor's attempts to appoint the Trustee and this judge as his personal fiduciaries, and the Debtor's continued pursuit of meritless legal theories previously rejected by this Court, this Court determines that the Debtor's bankruptcy petition and filings constitute an abuse of the bankruptcy system. The egregious nature of these acts warrants granting the UST's request to bar the Debtor from re-filing a bankruptcy case for a definite period of time pursuant to 11 U.S.C. § 349(a).
For these reasons, this Court grants the UST's Motion to Dismiss [Docket Number 45]. The Debtor's bankruptcy case is dismissed with a three-year bar to re-filing. This Court will refer this matter to the United States Attorney for the Southern District of Ohio for investigation.
SO ORDERED.