In re Skandis
| Decision Date | 02 November 2020 |
| Docket Number | Case No. KZ 19-05319-jtg |
| Parties | IN RE: Christine SKANDIS, Debtor. |
| Court | United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Western District of Michigan |
Matthew S. DePerno, Esq. for DePerno Law Office, PLLC; Jeff A. Moyer, Esq. in his capacity as Chapter 7 trustee; Mark H. Zietlow, Esq. for Eldean Company; Bonnie Lent-Davis, Esq. for Davis Legal PLC; and Dean E. Rietberg, Esq. for the United States Trustee
For over five months, Christine Skandis (the "Debtor") has refused to submit to examination and file schedules after conversion of her case from chapter 13 to chapter 7.1 Understandably frustrated, DePerno Law Office, PLLC ("DePerno"), a creditor of the Debtor, filed a motion requesting that the court direct the United States Marshal to apprehend the Debtor and bring her before the court to explain her non-compliance [Dkt. No. 261] (the "Motion to Apprehend"). Upon review of the Motion to Apprehend, the court entered an order requiring the Debtor to attend the hearing on the Motion to Apprehend. Consistent with her past practices in this case, the Debtor did not appear at the hearing.
For the following reasons, the court shall grant the Motion to Apprehend.2
The court has jurisdiction pursuant to 28 U.S.C. § 1334(a). This is a core proceeding under 28 U.S.C. § 157(b)(2)(A). See Mountain Am. Credit Union v. Skinner (In re Skinner) , 917 F.2d 444, 448 (10th Cir. 1990) (); New Prods. Corp. v. Dickinson Wright PLLC (In re Modern Plastics Corp.) , 577 B.R. 690, 702 (W.D. Mich. 2017) (citations omitted) (civil contempt claim arising out of core proceeding is itself core proceeding), aff'd sub nom . 890 F.3d 244 (6th Cir. 2018) ; In re Burkman Supply, Inc ., 217 B.R. 223, 227 (W.D. Mich. 1998) ().
The facts, while not complicated, are anesthetizing.3 On December 26, 2019, the Debtor filed a voluntary petition for relief under chapter 13. During the first few months of her chapter 13 case, the Debtor was represented at different times by two experienced bankruptcy attorneys. After her attorneys separately withdrew in March and April 2020, respectively, the Debtor repeatedly requested adjournments so that she could identify and retain a new attorney [Dkt. No. 146, 151, 162, 230].4 To date, no new attorney has been retained.
While the Debtor's case was still proceeding under chapter 13, the chapter 13 trustee filed a motion to dismiss for an unreasonable delay, among other things. During a series of hearings in March and April 2020, it became clear that the Debtor had either not disclosed, or could not account for, certain assets and liabilities. For example, the Debtor failed to disclose that she owned at least two motor vehicles, a 1946 Jaguar Saloon and a Hummer. Moreover, the Debtor could not recall when and why she may or may not have transferred title to other motor vehicles, all of which were Jaguars. To that end, the Debtor had a conveniently forgetful memory when she was asked about certain entities, including Skandis Fine Wines, LLC and Dante Design Associates, Inc., both of which are affiliates of the Debtor. Finally, it became apparent to the court that the Debtor had not disclosed other potentially valuable assets, including furniture, cases of wine and art pieces serving as collateral for the prepetition attorneys' fees and expenses she owed to DePerno.
On May 21, 2020, this court entered an order converting the Debtor's case from chapter 13 to chapter 7 [Dkt. No. 203] (the "Conversion Order") for many of the same reasons identified above as set forth in a detailed bench opinion [Dkt. No. 219]. In the Conversion Order, the court required the Debtor to file (i) an amended matrix, (ii) conversion schedules and requisite statements, (iii) a schedule of property not listed in the final report, (iv) a schedule of post-petition, pre-conversion contracts, (v) a schedule of unpaid debts, and (vi) a statement of intention. See Fed. R. Bankr. P. 1007 ; Fed. R. Bankr. P. 1019.
Less than one week after the Conversion Order was entered, the United States Trustee (the "UST"), in coordination with Jeff A. Moyer, the chapter 7 trustee (the "Trustee"), scheduled the meeting of creditors under section 341 for June 29, 2020 [Dkt. No. 211]. The Debtor inexplicably failed to appear on that date. (Contempt Order at ¶ 2.) After the Trustee rescheduled the meeting of creditors for July 28, 2020, the Debtor appeared on that date but refused to submit to examination without an attorney. (DePerno Aff. at ¶ 7.) The Trustee again rescheduled the meeting of creditors, this time for August 26, 2020.
On August 25, 2020, the day before the rescheduled meeting of creditors, the Debtor filed a "notice of withdrawal" of her chapter 7 case [Dkt. No. 230], which the court treated as a motion to dismiss and promptly denied without prejudice [Dkt. No. 232]. In its order, the court put the Debtor on notice that the court was aware, and concerned, that she had yet to meaningfully participate at the meeting of creditors or file conversion schedules as required by the Conversion Order.
At the rescheduled meeting of creditors on August 26, 2020, the Debtor appeared, but again did not meaningfully participate. (DePerno Aff. at ¶ 10.) The Debtor refused to answer questions for several reasons, including because she had no attorney. (Id. ) Again without meaningful participation from the Debtor, the Trustee rescheduled the meeting of creditors for September 16, 2020.
On September 3, 2020, the UST filed a motion [Dkt. No. 242] requesting that the court enter an order to show cause requiring the Debtor to participate in the rescheduled meeting of creditors on September 16, 2020. Upon receiving the motion, the court entered an order to show cause [Dkt. No. 244] (the "Show Cause Order"), which was served on the Debtor [Dkt. Nos. 243, 247]. The Debtor did not appear at the rescheduled meeting of creditors on September 16, 2020, however. (Contempt Order at ¶ 2; DePerno Aff. at ¶ 17.)
In response to the Debtor's failure to participate in the meeting of creditors, including on September 16, 2020, DePerno filed the Motion to Apprehend, which was served on the Debtor [Dkt. No. 261]. DePerno utilized the notice and opportunity to object procedures under LBR 9013, meaning that absent a written objection within fourteen days after service, DePerno could file a certificate of no response and upload a proposed order.
After the Debtor failed to appear at the show cause hearing on September 22, 2020, the court entered an order finding the Debtor in contempt [Dkt. No. 272] (the "Contempt Order"). Specifically, the court found that:
Shortly after the show cause hearing and while the Motion to Apprehend was pending, the Debtor was busy. She was not, however, busy complying with the Conversion Order or arranging to participate in the meeting of creditors. Instead, she focused her energy and efforts on a series of motions, all of which were attempts to escape from her obligations as a chapter 7 debtor.
On September 28, 2020, the Debtor renewed her motion to "withdraw" her case [Dkt. No. 278], which the court denied in an order entered that same day [Dkt. No. 279]. In its order, the court observed the following:
(Order Den. Mot. to Dismiss at p. 1.)
Also on September 28, 2020, the Debtor filed a motion to alter or amend the Contempt Order [Dkt. No. 277],5 as well as a notice of appeal with respect to the Contempt Order [Dkt. No. 280].6 The court denied the motion to alter or amend the Contempt Order in an order entered on September 30, 2020 [Dkt. No. 284].7
On October 9, 2020, the Debtor filed a motion to stay this case [Dkt. No. 294] pending the decision of the Michigan Court of Appeals in an appeal involving Eldean Company ("Eldean").8 The court entered an order [Dkt. No. 298] scheduling an in person hearing on the motion to stay for October 28, 2020.9
Four days after the Debtor filed her motion to stay, DePerno filed a certificate of no response [Dkt. No. 297] regarding the Motion to Apprehend. Instead of entering an order granting the relief requested in the Motion to Apprehend, the court decided to enter a scheduling order [Dkt. No. 299] (the "Scheduling Order") to provide the Debtor with one last opportunity to appear and meaningfully participate in the meeting of creditors. The Scheduling Order expressly stated in bold that the Debtor was...
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