In re Mitchell
Decision Date | 15 November 2000 |
Docket Number | No. 00-15497-JNF.,00-15497-JNF. |
Citation | 255 BR 345 |
Parties | In re James H. MITCHELL, III and Mary A. Mitchell, Debtors. |
Court | U.S. Bankruptcy Court — District of Massachusetts |
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James H. Mitchell, III, Mary A. Mitchell, debtors pro se.
Doreen Solomon, Boston, MA, for Chapter 13 Trustee.
The matter before the Court is the Debtors' Verified Motion to Vacate Dismissal of this Court's order of September 19, 2000, dismissing their Chapter 13 case pursuant to 11 U.S.C. § 109(g).1 The issue presented by the Motion to Vacate Dismissal is whether the Debtors' unsecured debt exceeds the ceiling set forth in 11 U.S.C. § 109(e), thereby disqualifying them for relief under Chapter 13, because of a judgment entered against them in the sum of $275,000. If the Debtors are ineligible for relief under Chapter 13 granting their Motion to Vacate would be futile.
In view of the Debtors' Verified Memorandum of Law Concerning Their Eligibility to Be Chapter 13 Debtors, which Memorandum is 130 pages long and contains references to 85 exhibits; the Affidavit of Marilyn W. Mitchell in Support of Debtors' Memorandum of Law Concerning Their Eligibility to Be Chapter 13 Debtors; the Opposition of Xytest Corporation to Debtors' Motion to Vacate Dismissal; the Affidavit of Richard E. Bennett; the Debtors' Verified Reply Memorandum in Support of Debtors' Verified Motion to Vacate Dismissal, which Reply Memorandum is 53 pages long and contains references to five exhibits; the Declaration of James H. Mitchell, Jr. in Support of Debtors' Verified Reply Memorandum in Support of Debtors' Verified Motion to Vacate Dismissal; the Response of Xytest Corporation to Debtors' Reply Memorandum in Support of Their Motion to Vacate Dismissal; the Debtors' Verified Sur-Surreply Memorandum in Support of Debtors' Verified Motion to Vacate Dismissal, which Sur-Surreply Memorandum is 34 pages long and contains references to three exhibits; and the Debtors' Supplement to Verified Sur-Surreply Memorandum in Support of Debtors' Verified Motion to Vacate Dismissal, the Court finds that oral argument with respect to the Debtors' Motion to Vacate Dismissal is unnecessary and unwarranted. For the reasons set forth below, the Court denies the Debtors' Verified Motion to Vacate Dismissal and modifies its order of September 19, 2000.
The following facts cannot be controverted. With the exception of the judgment entered by the California Superior Court for San Mateo County, which judgment is attached as Exhibit 1 to the Affidavit of Richard E. Bennett, the Court has gleaned the facts from the petition, Schedules, Statement of Financial Affairs, Statement Concerning Schedules, and pleadings filed by the Debtors in their Chapter 13 case and their pending Chapter 7 case (Case No. 94-18204-JNF).
The Debtors filed a voluntary petition under Chapter 13 of the Bankruptcy Code on August 15, 2000. On their petition, they disclosed their pending Chapter 7 case. The Court takes judicial notice that an adversary proceeding is pending in the Debtors' Chapter 7 case in which two creditors, Xytest Corporation ("Xytest") and George R. Berbeco ("Berbeco"), are seeking a determination that a judgment that they obtained in the Superior Court of San Mateo, California in June of 1999 in the sum of $275,000 is nondischargeable either as a post-petition debt or under 11 U.S.C. § 523.2 The Debtors and Somerset Capital Corporation ("Somerset") appealed the California judgment.
The Debtors filed Schedules, a Statement of Financial Affairs and a "Statement Concerning Schedules" on August 15, 2000 with their petition. At the top of each Schedule, they wrote "This page is subject to the qualifications specified in the attached Statement Concerning Schedules."
On Schedule A — Real Property, they indicated that they do not own any real property. On Schedule B — Personal Property, they disclosed ownership interests in cash on hand ($100), audio equipment ($500), household goods and furnishings ($5,000), two automobiles ($1,000 and $3,500), and two dogs and two cats ($100). With respect to other categories of personal property, namely stock and interests in incorporated and unincorporated businesses, interests in partnerships or joint ventures, accounts receivable, other contingent and unliquidated claims of every nature, patents, copyrights, other intellectual property, and office equipment, furnishings and supplies, the Debtors stated "Please see attached Statement." On Schedule C — Property Claimed as Exempt, the Debtors claimed the bulk of their property as exempt. On Schedule D — Creditors Holding Secured Claims, the Debtors listed Loretta A. Troy, Mary Mitchell's mother, as the holder of a lien on the Debtors' 1993 Ford Taurus. The Debtors indicated that the amount of Loretta Troy's secured claim was $3,500 and that the unsecured portion of her claim was $2,400. The Debtors listed no creditors on Schedule E — Creditors Holding Unsecured Priority Claims.
On Schedule F — Creditors Holding Unsecured Nonpriority Claims, the Debtors listed 39 creditors. Of the 39 creditors, the Debtors listed six creditors as holding noncontingent claims as follows: 1) Catuogno Court Reporting Services ($400), 2) David Bromley ($46,330),3 3) Mihaly, Schulyer & Mitchell, a Los Angeles, California law firm at which the James H. Mitchell, III's father, James H. Mitchell, Jr., is a named partner (the Debtors indicated that the amount of the claim was unknown), 4) National Video Reporters (the Debtors indicated that they disputed the claim in the amount of $2,106.08),4 5) Quinlan Court Reporting ($2,103), and 6) William J. Pitak, Mary Mitchell's father, ($1,500). Thus, the Debtors listed two creditors, who are insiders, as that term is defined in 11 U.S.C. § 101(31)(A), with noncontingent claims, and only four noninsider creditors with noncontingent claims.
The Debtors listed Xytest as the holder of a contingent claim in the amount of "0.00." They indicated that the claim was incurred in January of 1995, that the claim was subject to setoff, and that there was no consideration for the claim. They also referred to their attached Statement Concerning Schedules, further indicating that Xytest was a "precautionary creditor." The Debtors provided much the same information with respect to the claims of the remaining 32 "precautionary creditors," including Thermonics, Inc., Paul J. Roberts, James C. Kufis, George B. Kurtz and George R. Berbeco, FET/Test, Inc., as well as numerous attorneys and law firms that represented both the plaintiffs in the California action and the Debtors. On Schedule H — Codebtors, the Debtors listed Somerset as a codebtor with respect to 23 of the 39 claims appearing on Schedule F.
The Debtors filed Schedules I and J — Current Income and Expenses of Individual Debtor(s), but included no information on these Schedules other than their ages on Schedule I. At the top of Schedule I, they wrote: "Please see attached Statement." At the top of Schedule J, they wrote: "Please see other Schedule J." Thus, in lieu of Schedule J that is part of Official Bankruptcy Form 6, the Debtors filed their own "Schedule J" on which they simultaneously included both their personal and business expenses broken down for the calendar year 1999 and for the seven month period beginning on January 1, 2000 and ending on July 31, 2000. Accordingly, the Debtors did not provide an itemization of either their monthly individual income or expenses.
The following chart summarizes the Debtors' expenses for the January 1 to July 31, 2000 period and includes a monthly sum obtained by dividing the Debtors' figures for that period by seven.
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