In re Surace, Bankruptcy No. SA 85-00037 RP.
| Citation | 52 BR 868 |
| Decision Date | 17 September 1985 |
| Docket Number | Bankruptcy No. SA 85-00037 RP. |
| Parties | In re Vincent Joseph SURACE, Sr., aka Vincent J. Surace, Sr., aka Vincent J. Surace aka V.J. Surace dba Santa Ana Back Pain Clinic, Debtor(s). |
| Court | United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — Central District of California |
Stanley Minier, Stanley Minier, Inc., Santa Ana, Cal., for movant Ann Lohrbach.
Gerald Klein, Klein & Associates, Garden Grove, Cal., for debtors.
MEMORANDUM AND ORDER DENYING MOTION TO DISMISS
Ann Lohrbach is a creditor holding a state court judgment in the amount of $168,807 plus costs and attorney's fees against the debtor. She has filed a motion to dismiss the above-entitled Chapter 7 case and said motion came on regularly for hearing before the undersigned bankruptcy judge on September 5, 1985.
The motion asserts that Mr. Surace is not qualified to be a debtor because he had a prior bankruptcy case dismissed within 180 days before the filing of the instant case, citing 11 U.S.C. § 109(f). Section 109(f) was added to the Bankruptcy Code by the Bankruptcy Amendments and Federal Judgeship Act of 1984, effective as to cases filed after October 9, 1984. As a separate ground for dismissal, Lohrbach relies upon an order entered in a prior Chapter 13 case enjoining the debtor from filing any new bankruptcy case within 180 days without prior order of court.
On June 25, 1984 the debtor, not represented by counsel, filed a Chapter 13 case in this court, numbered SA 84-02571 PE. On August 14, 1984 an order was filed and entered dismissing the Chapter 13 case on the trustee's motion for failure to file a Chapter 13 statement and plan.
On September 18, 1984 the debtor, again without counsel, filed a Chapter 13 case in this case, numbered SA 84-03681 RP. On November 8, 1984 the second Chapter 13 case was dismissed on the trustee's motion on the same grounds, failure to file a Chapter 13 statement or plan.
On November 20, 1984, the formal written order prepared by the Chapter 13 trustee and signed by the judge not only dismissed the Chapter 13 case, but also enjoined the debtor from filing a subsequent bankruptcy petition for 180 days from the date of the order without prior order of court.
On January 7, 1985 the debtor, now represented by attorney Gerald Klein, filed this Chapter 7 case, numbered SA 85-00037 RP.
Because the debtor is allegedly in violation of the injunction issued by another judge of this court, the motion to dismiss should more properly have been heard by that judge. However, he has recused himself in all cases involving Mr. Minier, counsel for movant. Therefore I reluctantly address the validity of my colleague's order.
The debtor, through his attorney, Mr. Klein, correctly points out that there was absolutely no notice to the debtor that the court might enter an order enjoining him from refiling bankruptcy within 180 days. The only notice served on the debtor in SA 84-03681 is a notice to the effect that Bankruptcy Rule 1007 requires that the debtor file a Chapter 13 statement and plan within 15 days and that if he did not do so, the trustee's motion for an order dismissing the case would be heard on November 8, 1984. The trustee did not institute an adversary proceeding as required by Bankruptcy Rule 7001.
Elementary due process requires that the debtor have notice of the possibility of an injunction being issued.
The injunction against refiling within 180 days is similar to an order in a relief from stay matter that future bankruptcy filings by the debtor shall not affect the order granting relief from stay. The latter order was overturned by the District Court in In re Norris, 39 B.R. 85 (E.D.Pa.1984) as beyond the power of the bankruptcy court.
I am constrained to hold that an order prohibiting the debtor from filing another bankruptcy case within 180 days issued without notice of any kind is void and violation of that order is not grounds for dismissal of this Chapter 7 case.
DEBTOR'S ELIGIBILITY UNDER § 109(f)
11 U.S.C. § 109(f) provides in part:
The debtor argues that because § 109(f) only applies to cases filed after October 9, 1984, and since the second Chapter 13 was filed earlier, September 18th, the section does not apply. I disagree and hold that because this Chapter 7 case was filed after October 9, 1984 the section refers to the debtor's eligibility to file this Chapter 7 case without regard to the filing date of the prior case so long as it was pending within the preceding 180 days.
The creditor argues that the debtor has failed to abide by orders of the court and has failed to appear before the court in proper prosecution of the case. But no orders were made in either of the prior Chapter 13 cases requiring the debtor to do anything and therefore it follows that he has not willfully failed to obey any orders.
The creditor further argues that the debtor's failure to appear in response to the trustee's motion to dismiss the Chapter 13 case is a failure to appear in proper prosecution of the Chapter 13 case. Neither party cites any authorities. My research reveals two cases that shed light on the issue. In In re Ellis, 48 B.R. 178 (Bankr.E.D.N.Y.1985) the debtor's initial petition had been dismissed following the debtor's failure to (i) complete her petition by timely filing her plan; and (ii) comply with the court's order to appear and show cause why her petition should not be dismissed. Her second petition was filed within 180 days of the prior dismissal. The debtor contended that her conduct was not "willful" within the meaning of § 109(f)(1) because she had relied on her...
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