In re Pike
| Decision Date | 09 February 2001 |
| Docket Number | No. 00-36842.,00-36842. |
| Court | U.S. Bankruptcy Court — Southern District of West Virginia |
| Parties | In re Lavonne Carol PIKE, Debtor. |
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Lavonne Carol Pike, Debtor, New Carlisle.
John C. Juergens, Springfield, for Debtor.
John A. Schuh, Cincinnati, for Ford Motor Credit.
Jeffrey M. Kellner, Englewood, Chapter 13 Trustee.
The issue before the Court is whether Lavonne Carol Pike (the "Debtor") is eligible to be a debtor under Chapter 13 of the Bankruptcy Code (the "Code"). The issue of the Debtor's eligibility for Chapter 13 relief has been raised by Ford Motor Credit Co. ("Ford") in its Motion to Dismiss Chapter 13 Case (the "Dismissal Motion"). An expedited hearing on the Dismissal Motion (the "Hearing") was conducted on January 22, 2001. The Court concludes that the Debtor's previous Chapter 13 case was dismissed due to the Debtor's willful failure to abide by orders of the Court and appear in proper prosecution of her case. Thus, under § 109(g) of the Code, the Debtor is ineligible for Chapter 13 relief. An order dismissing this case shall be entered.
This memorandum opinion constitutes the Court's findings of fact and conclusions of law. Fed. R. Bankr.P. 7052.
The Court has jurisdiction over this contested matter pursuant to 28 U.S.C. §§ 157 and 1334 and the general order of reference entered in this judicial district. This is a core proceeding. 28 U.S.C. § 157(b)(2).
Ford has filed memoranda supporting the Dismissal Motion and its motion for relief from stay, which was filed contemporaneously with the Dismissal Motion. In the memoranda filed by Ford, a chronology of the events preceding the filing of the Dismissal Motion is set forth. At the Hearing, Debtor's counsel stipulated to the accuracy of the factual chronology, a summary of which follows.
The Debtor has filed six bankruptcy petitions in the past ten years. Four of those filings have been made within the past two and one half years.
On July 20, 1992, the Debtor filed a Chapter 7 petition (the "First Case"). The Debtor received a discharge in the First Case pursuant to 11 U.S.C. § 727.
On September 29, 1994, the Debtor filed her second bankruptcy case (the "Second Case"), which sought relief under Chapter 13 of the Code. The Second Case was dismissed. No evidence was offered by either Ford or the Debtor as to the reason for dismissal of the Second Case.
On June 29, 1998, the Debtor purchased a 1996 Ford Thunderbird (the "Automobile"). Ford financed the purchase of the Automobile, providing the Debtor with a loan in the original principal amount of $9,897.40 (the "Loan") and perfecting a security interest in the Automobile to secure the Loan's repayment. On August 29, 1998, the Debtor made her first and only contractual payment on the Loan in the amount of $263. On October 16, 1998, following the Debtor's payment default, Ford repossessed the Automobile. Three days later, the Debtor filed a Chapter 13 petition (the "Third Case") and the next day Ford returned the Automobile to her. At the time the Third Case was filed, Ford was listed as the Debtor's only secured creditor. The Debtor scheduled approximately $500 of unsecured debt. An additional unsecured creditor, holding a claim of approximately $1,900, later was added to the Debtor's schedules by amendment. On July 19, 1999, the Third Case was dismissed due to the Debtor's failure to make plan payments to the Chapter 13 Trustee (the "Trustee").
On August 11, 1999, the Debtor filed another petition for Chapter 13 relief (the "Fourth Case"). In the Fourth Case, the Debtor listed two unsecured debts totaling $2,200. Ford, which was scheduled as holding a secured claim of $11,000 and an unsecured claim of $21.49, was listed as the Debtor's only other creditor in the Fourth Case. On December 17, 1999, the Trustee moved for dismissal of the Fourth Case for failure to make the required plan payments. The Trustee's motion was denied and the Debtor was ordered to make future plan payments or her case would be dismissed. On March 21, 2000, the Fourth Case was dismissed due to nonpayment.
On May 10, 2000, Ford again repossessed the Automobile. The same day, the Debtor filed a "skeletal"1 Chapter 13 petition (the "Fifth Case"). Ford returned the Automobile the next day. In the Fifth Case, the Debtor scheduled three unsecured creditors who were owed a total of approximately $2,700. Ford, which was the only other creditor listed in the Fifth Case, was scheduled as holding a secured claim of $6,000 and an unsecured claim of $6,000. On September 22, 2000, the Trustee moved for dismissal of the Fifth Case as a result of the Debtor's default in plan payments. By order entered November 8, 2000 (the "November 8 Order") the Trustee's motion was denied. The November 8 Order provided in pertinent part:
IT IS FURTHER ORDERED that the debtor shall pay $1,420.00 by November 3, 2000 and if the debtor fails to make the aforesaid payment, the Trustee shall submit an order to the court dismissing this case without further notice or hearing. After November 3, 2000 the debtor shall continue to make the plan payments.
On November 17, 2000, the Fifth Case was dismissed for nonpayment. The order dismissing the Fifth Case (the "Dismissal Order") simply recited that the case was being dismissed due to the Debtor's failure to make plan payments in accordance with the November 8 Order.
Ford repossessed the Automobile for the third time on December 27, 2000. That same day, Debtor informed Ford she would be filing for bankruptcy protection and told a representative of Ford that her attorney was Rebecca Barthelemy-Smith. Ford's counsel contacted Ms. Barthelemy-Smith, who advised Ford's counsel that she was not, in fact, representing the Debtor. Two days later, on December 29, 2000 (the "Petition Date") the Debtor filed a pro se, skeletal2 Chapter 13 petition (the "Sixth Case"). Ford then filed the Dismissal Motion.
Ford has received a total of $1,876.06 in repayment of the Loan. This amount was received from the following sources:
--------------------------------------------------
Amount Source
---------------------------------------------------
$ 263.00 First and only contractual
payment made on
the Loan by the Debtor
on August 29, 1998
---------------------------------------------------
$ 876.68 Total disbursements
made to Ford by the
Trustee in the Third
Case
---------------------------------------------------
$ 528.40 Total disbursements
made to Ford by the
Trustee in the Fourth
Case
---------------------------------------------------
$ 207.98 Total disbursements
made to Ford by the
Trustee in the Fifth
Case
___________________________________________________
Total.....$1,876.06
___________________________________________________
Had the Debtor continued making regular monthly payments of $263 to Ford from the date that the Loan's first payment was due through the Petition Date, Ford would have received contractual payments totaling $7,364.
According to Ford, the Debtor has engaged in precisely the type of abusive conduct that prompted enactment of § 109(g) of the Code: the filing of successive bankruptcy petitions to obtain the benefit of the automatic stay and thereby thwart Ford's efforts to repossess and sell the Automobile. Ford asserts that the same sequence of events has unfolded in each of the Third, Fourth and Fifth Cases: (1) a Chapter 13 filing by the Debtor; (2) default in plan payments after only minimal progress toward plan completion was made; (3) dismissal due to the Debtor's repeated payment defaults; and (4) refiling after Ford's repossession of the Automobile. Ford argues that from this pattern of serial filings — without a change in the Debtor's circumstances — the Court may infer that the Fifth Case was dismissed due to Debtor's willful failure to abide by orders of the Court and/or properly prosecute her case. As further evidence of willfulness, Ford cites the Debtor's admission at the Hearing that she intentionally failed to make payments in the Fifth Case because she believed that an extrajudicial workout arrangement could be negotiated with Ford after dismissal of the case. Thus, Ford maintains that the Debtor is ineligible for Chapter 13 relief.
The Debtor asserts that, as a matter of law, § 109(g) does not bar her eligibility for relief because the Dismissal Order did not expressly state that dismissal of the Fifth Case resulted from a willful failure on her part. Alternatively, the Debtor maintains that a change in circumstances since the Fifth Case's dismissal justifies a finding that the Debtor's successive filings have been proper and, thus, she is eligible to be a Chapter 13 debtor.
The Code's central purpose is remedial: to afford the honest but unfortunate debtor "a new opportunity in life with a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt." Grogan v. Garner, 498 U.S. 279, 286, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991) (quoting Local Loan Co. v. Hunt, 292 U.S. 234, 244, 54 S.Ct. 695, 78 L.Ed. 1230 (1934)). But debtors who do not file in good faith and seek to abuse the bankruptcy process should not be afforded relief. See Industrial Ins. Servs., Inc. v. Zick (In re Zick), 931 F.2d 1124, 1129 (6th Cir.1991) (...
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