In re Spencer

• Decision Date: 13 May 2008
• Docket Number: No. 06-00314.,06-00314.
• Citation: 388 B.R. 418
• Parties: In re Regina Anquionette SPENCER, Debtor.
• Court: United States Bankruptcy Courts – District of Columbia Circuit

Page 418

388 B.R. 418

In re Regina Anquionette SPENCER, Debtor.

No. 06-00314.

United States Bankruptcy Court, District of Columbia.

May 13, 2008.

Regina Anquionette Spencer, Washington, DC, pro se.

AMENDED MEMORANDUM DECISION RE EFFECTIVE DATE OF DISMISSAL OF CASE

S. MARTIN TEEL, JR., Bankruptcy Judge.

The court entered an earlier order granting the United States Trustee's motion under § 521(i)(2) of the Bankruptcy Code (11 U.S.C.) to dismiss the case on the basis of 11 U.S.C. § 521(i)(1). The order, however, left open the issue of the date on which the dismissal should be made effective. In re Spencer, 2006 WL 3820702 (Bankr.D.D.C. Dec.22, 2006).

I

Section 521(i)(1) provides Subject to paragraphs (2) and (4) and notwithstanding section 707(a), if an individual debtor in a voluntary case under chapter 7 or 13 fails to file all of the information required under subsection (a)(1) within 45 days after the date of the filing of the petition, the case shall be automatically dismissed effective on the 46th day after the date of the filing of the petition.

Section 521(i)(2) (to which § 521(i)(1) is expressly made subject) provides:

Subject to paragraph (4) and with respect to a case described in paragraph (1), any party in interest may request the court to enter an order dismissing the case. If requested, the court shall enter an order of dismissal not later than 5 days after such request.

Section 521(i)(3) (to which § 521(i)(1), through apparent drafting error, is not expressly made subject, but to which § 521(i)(1) plainly is subject) and § 521(i)(4) (to which § 521(i)(1) is expressly made subject) provide:

(3) Subject to paragraph (4) and upon request of the debtor made within 45 days after the date of the filing of the petition described in paragraph (1), the court may allow the debtor an additional period of not to exceed 45 days to file the information required under subsection (a)(1) if the court finds justification for extending the period for the filing.

(4) Notwithstanding any other provision of this subsection, on the motion of the trustee filed before the expiration of the applicable period of time specified in paragraph (1), (2), or (3), and after notice and a hearing, the court may decline to dismiss the case if the court finds that the debtor attempted in good faith to file all the information required by subsection (a)(1)(B)(iv) and that the best interests of creditors would be served by administration of the case.

The debtor did not timely move under § 521(i)(3) to enlarge the 45-day deadline of § 521(i)(1). After the United States Trustee moved for dismissal of the case, the chapter 7 trustee failed to move in a timely manner under § 521(i)(4) for a determination that the grounds specified by § 521(i)(4) required that the case ought not be dismissed. Dismissal was mandatory once it was determined that not all of the documents required by § 521(a)(1) had been filed by the 45-day deadline.¹ Accordingly, I issued an order dismissing the case, but I deferred ruling on when dismissal was to be treated as having occurred, and invited the views of interested parties regarding the issue. The United States Trustee and Cynthia A. Niklas, the standing chapter 13 trustee for this district, filed responses regarding the issue.

II

[1] Section 521(i) addresses the consequences of a failure of an individual debtor to file the papers required by 11 U.S.C. § 521(a)(1) within the 45-day period after the date of his filing of a petition commencing a case under chapter 7 or 13 of the Bankruptcy Code. Specifically, § 521(i)(1) directs that if the 45-day period has not been enlarged under § 521(i)(3), and if the debtor has failed to comply with § 521(a)(1) at the end of day 45 of the case, then "[s]ubject to paragraphs (2) and (4) ..., the case shall be automatically dismissed effective on the 46th day after the date of the filing of the petition."

The command of § 521(i)(1) does not mean that when § 521(i)(1) is triggered, the case stands automatically dismissed as of the 46th day, for the command is expressly made subject to, and its meaning clarified by, a procedure under § 521(i)(2) which requires that not later than 5 days after a party in interest requests the entry of an order dismissing a case described in § 521(i)(1), the court shall enter "an order dismissing the case,"² (not an order, analogous to one under 11 U.S.C. § 362(j), confirming that the case was already dismissed).³ Moreover, § 521(i)(4)—permitting a trustee to file a motion within the 5day period of § 521(i)(2) to have the court "decline to dismiss the case"—would be internally inconsistent with § 521(i)(1) if under § 521(i)(1) dismissal already occurred on day 46.⁴

"Statutory construction ... is a holistic endeavor." United Sav. Ass'n of Tex. v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365, 371, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988). A court must "follow the cardinal rule that a statute is to be read as a whole since the meaning of statutory language, plain or not, depends on context." King v. St. Vincent's Hosp., 502 U.S. 215, 221, 112 S.Ct. 570, 116 L.Ed.2d 578 (1991) (citations omitted).⁵ It is thus necessary to interpret 521(i)(1) in light of other provisions of the Bankruptcy Code and to strive for an interpretation of § 521(i)(1) whose effects are compatible with the Bankruptcy Code as a whole. See Timbers of Inwood Forest, 484 U.S. at 371, 108 S.Ct. 626. Moreover, a statutory provision ought not be interpreted in a fashion that eviscerates or renders mere surplusage another provision of the same statute. Citizens Bank of Md. v. Strumpf, 516 U.S. 16, 20, 116 S.Ct. 286, 133 L.Ed.2d 258 (1995) (statute will not be held to destroy itself); Dunn v. CFTC, 519 U.S. 465, 472, 117 S.Ct. 913, 137 L.Ed.2d 93 (1997) (courts should avoid interpretation of a provision that renders another provision mere surplusage); Ratzlaf v. United States, 510 U.S. 135, 140-141, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994) (same).

Because § 521(i)(1) cannot be construed in isolation without considering § 521(i)(2) and (4), the language in § 521(i)(1) that "the case shall be automatically dismissed" is susceptible of being interpreted as meaning that the court has no discretion not to dismiss the case, and the language "effective on the 46th day" simply marks the date on which the court is deprived of such discretion. Dismissal at the point of day 46 of the case is automatically required, with an order of dismissal to be entered under § 521(i)(2) within 5 days of a request being made for dismissal based on § 521(i)(1) having been triggered. If the statute contemplated that the case is to stand automatically dismissed effective upon § 521(i)(1) being triggered on the 46th day, no order of dismissal would be necessary. A case does not stand dismissed unless and until the order of dismissal contemplated by § 521(i)(2) is entered, and the date of entry of the order of dismissal is the date on which the case is dismissed.

III

Even when read in isolation from the provisions in the companion paragraphs of § 521(i) to which it is made subject, the command in § 521(i)(1) that "the case shall be automatically dismissed" can, for additional reasons, reasonably be read as meaning that dismissal is automatic in the sense that no showing of cause is required and the court no longer has discretion to deny dismissal if the debtor failed to satisfy the filing requirements of § 521(a)(1). When the language "shall be automatically dismissed" is thus understood as a directive to the court requiring that the court dismiss the case without any concomitant showing of cause, the following clause "effective on the 46th day after the date of the filing of the petition" is most naturally understood as setting the point in time at which the court becomes subject to that directive, and the debtor is deprived of any right to show cause why the case ought not be dismissed. Thus, the 46th day is not the date on which the dismissal itself is effective, but rather, the date effective as of which the court is divested of the discretion to deny a request for dismissal. Three principal reasons support that reading of the statute.

A.

When a statute, rule, or court order intends that a case is to stand automatically dismissed without the necessity of a court order upon an event occurring, language is used making that clear. See Swint v. Smith, 219 Ga. 532, 134 S.E.2d 595, 596 (1964) (discussing state statute which provided that "any suit filed in any of the courts of this State in which no written order is taken for a period of five years the same shall automatically stand dismissed....") (emphasis added); Clark v. Ganson, 144 Ga. 544, 87 S.E. 670, 670 (1916) (holding that "where the order sustaining the demurrer allowed a definite time within which an amendment might be filed, and provided that, if no such amendment was filed within the time allowed, `the suit to stand dismissed,' if no amendment was filed, the suit was automatically dismissed.") (emphasis added); Fed. R.Civ.P. 41(a) (providing in Rule 41(a)(1), at the time of enactment of § 521(i), that a civil action "may be dismissed by the plaintiff without order of court (i) by filing a notice of dismissal [by a specified deadline], or (ii) by filing a stipulation of dismissal...." (emphasis added)).

In comparison to such clear statutory expressions that a case stands dismissed on a specified date, § 521(i)(1) does not use language that clearly would deem the case actually dismissed on the 46th day after the filing of the petition. Had Congress intended that when § 521(i)(1) is triggered, the case is actually dismissed on the 46th day, the statute could have provided that "the case is dismissed effective on the 46th day." In other provisions of the Bankruptcy Code, that is how Congress expressed the idea of an event occurring without the necessity of an order of the court. See 11 U.S.C. § 362(h) ("the stay ... is terminated");...