In Re Vincent John Cusano, 09-8055.

• Citation: 431 B.R. 726
• Decision Date: 25 June 2010
• Docket Number: No. 09-8055.,09-8055.
• Parties: In re Vincent John CUSANO, Debtor.Vincent John Cusano, Appellant,v.Gene Klein, Paul Stanley, Gene Simmons Worldwide, Inc., Kisstory, Ltd., Polygram Records, Inc., Simstan Music, Ltd., and The Kiss Company, Appellees.
• Court: Bankruptcy Appellate Panels. U.S. Bankruptcy Appellate Panel, Sixth Circuit

431 B.R. 726

of the Sixth Circuit.

In re Vincent John CUSANO, Debtor.

Vincent John Cusano, Appellant,

v.Gene Klein, Paul Stanley, Gene Simmons Worldwide, Inc., Kisstory, Ltd., Polygram Records, Inc., Simstan Music, Ltd., and The Kiss Company, Appellees.

No. 09-8055.

United States Bankruptcy Appellate Panel

Submitted: May 3, 2010.

Decided and Filed: June 25, 2010.

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ON BRIEF: Marc T. McNamee, Stephen M. Montgomery, Neal & Harwell, PLC, Nashville, Tennessee, for Appellees. Vincent Cusano, Franklin, Tennessee, pro se.

OPINION

ARTHUR I. HARRIS, Bankruptcy Judge.

Vincent John Cusano (“Debtor”) pro se, appeals an order of the bankruptcy court conditioning the voluntary dismissal of his Chapter 13 case. The bankruptcy court barred the Debtor from refiling any voluntary petition under Chapter 13 for two years and limited the effect of the automatic stay should the Debtor file any voluntary petition for relief. For the reasons that follow, we AFFIRM the order of the bankruptcy court.

I. ISSUES ON APPEAL

The issues on appeal are whether the bankruptcy court erred when it found that the Debtor filed his Chapter 13 case in bad faith and, having so found, whether it erred in conditioning the dismissal of his case.

II. JURISDICTION AND STANDARD OF REVIEW

The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal. The United States District Court for the Middle District of Tennessee has authorized appeals to the Panel, and no party has timely elected to have this appeal heard by the district court. See 28 U.S.C. § 158(b)(6), (c)(1). A final order of the bankruptcy court may be appealed as of right pursuant to 28 U.S.C. § 158(a)(1). For purposes of appeal, an order is final if it “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Midland Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S.Ct. 1494, 1497, 103 L.Ed.2d 879 (1989) (citations omitted). The bankruptcy court's order modifying and conditioning the Debtor's dismissal of his Chapter 13 case left the court with “nothing to do but execute the judgment” and is, therefore, final.

The court's findings of fact, including whether the Debtor acted in bad faith, are reviewed under the clearly erroneous standard. See Alt v. United States (In re Alt), 305 F.3d 413, 420 (6th Cir.2002). “A finding of fact is clearly erroneous ‘when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.’ ” Riverview Trenton R.R. Co. v. DSC, Ltd. (In re DSC, Ltd.), 486 F.3d 940, 944 (6th Cir.2007) (quoting Anderson v. Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985)).

The bankruptcy court's legal conclusions, including whether the bankruptcy court had authority to bar the Debtor from refiling under Chapter 13 for two years, are reviewed de novo. See Marshall v. McCarty (In re Marshall), 407 B.R. 359, 362 (8th Cir. BAP 2009). “De novo means that the appellate court determines the law independently of the trial court's determination.” Treinish v. Norwest Bank Minn., N.A. (In re Periandri), 266 B.R. 651, 653 (6th Cir. BAP 2001) (citations omitted).

The grant or denial of a motion to amend a judgment is reviewed for an abuse of discretion. See Hamerly v. Fifth Third Mortgage Co. (In re J & M Salupo Dev. Co.), 388 B.R. 795, 800 (6th Cir. BAP 2008). The bankruptcy court's decision to bar the Debtor from subsequent filings for two years and to provide prospective relief from the automatic stay is also reviewed under the abuse of discretion standard. Marshall, 407 B.R. at 362. “ ‘Under this standard [of review], the district court's decision and decision-making process need only be reasonable.’ ” In re J & M Salupo Dev. Co., 388 B.R. at 800 (quoting Pequeno v. Schmidt (In re Pequeno), 240 Fed.Appx. 634, 636 (5th Cir.2007)). “An abuse of discretion occurs only when the [trial] court relies upon clearly erroneous findings of fact or when it improperly applies the law or uses an erroneous legal standard.” Volvo Commercial Fin. LLC the Americas v. Gasel Transp. Lines, Inc. (In re Gasel Transp. Lines, Inc.), 326 B.R. 683, 685 (6th Cir. BAP 2005) (quoting Schmidt v. Boggs (In re Boggs), 246 B.R. 265, 267 (6th Cir. BAP 2000)).

III. FACTS

Debtor Vincent Cusano, who is professionally known as Vinnie Vincent, (“Debtor”) is a professional musician who was the lead guitarist for the band KISS from 1982 to 1984. During that time, and again in 1992, he co-wrote a number of songs for the band and entered into an agreement to share royalties evenly.

In 1989, the Debtor filed a petition for relief under Chapter 11 of the Bankruptcy Code. Listed on his schedules were rights in songs he had written for KISS, and listed as creditors were band members Gene Klein (a/k/a Gene Simmons) and Paul Stanley. His proposed Chapter 11 plan was confirmed in 1990 and fully consummated in 1993, and the case was closed.

In 1997, the Debtor filed suit in the United States District Court for the Central District of California against KISS, individual band members Gene Klein and Paul Stanley, and others for inter alia, unpaid royalties, defamation, and infringement on the right of publicity. The district court dismissed the Debtor's claims with prejudice and awarded attorney's fees and costs to the defendants. The Debtor then appealed to the Ninth Circuit Court of Appeals. Primarily at issue in that appeal were the effect of the Chapter 11 case upon postpetition unpaid royalties, the effect of statutes of limitations on the defamation and right of publicity claims, and the award of attorney's fees. In short, the Ninth Circuit concluded that the Debtor's postpetition song right royalties were the Debtor's property and reinstated certain claims based on that ruling. It further held that the Debtor's defamation and right of publicity claims were time barred. Because the award of attorney's fees was based on the defendants' status as “prevailing parties” on the right of publicity claim, the Ninth Circuit affirmed the award. On remand, the district court entered an order on September 5, 2003, dismissing the Debtor's claims in their entirety and awarding $66,457.47 in attorney's fees and $15,473.90 in costs to Gene Klein, Paul Stanley, The KISS Company, Gene Simmons Worldwide, Inc., SimStan Music, Ltd., KIS Story, Ltd., and Polygram Records, Inc. (“Appellees”). As of January, 2010, this judgment was the subject of five pending appeals filed by the Debtor in the Ninth Circuit Court of Appeals.

Following entry of the judgment, the Appellees secured their judgment lien on copyrights owned by the Debtor and perfected their lien by recording their judgment in the United States Copyright Office on November 30, 2004. In 2004 and 2005, the Appellees served notices of garnishment on several companies that administer the Debtor's copyrights and disburse his royalties, including Broadcast Music, Inc. (“BMI”).

In November, 2007, the Appellees obtained an order from the United States District Court for the Central District of California compelling the Debtor to appear for a judgment debtor examination on December 21, 2007. The Debtor moved to quash the order. His motion to quash was denied on December 12, 2007.

On December 14, 2007, the Debtor entered into a retainer agreement with attorney Dave Nave (“Nave”) to file a petition for relief on his behalf under Chapter 13 of the Bankruptcy Code. On December 19, 2007, despite having retained Nave, the Debtor filed a petition for relief under Chapter 13 pro se resulting in the cancellation of the judgment debtor examination scheduled for December 21, 2007. He did not, however, complete the budget and credit counseling briefing required by 11 U.S.C. § 109(h). The petition was, therefore, dismissed on February 1, 2008.

The Appellees then moved to amend their judgment to incorporate $37,925.40 in monetary sanctions awarded by the Ninth Circuit Court of Appeals against the Debtor for filing a frivolous appeal. On February 15, 2008, after briefs regarding the motion to amend had been filed, the Debtor, represented by Nave, filed a second Chapter 13 petition. On February 22, 2008, the district court in California granted the motion to amend the Appellees' judgment. The Debtor appealed the February 22, 2008, order to the Ninth Circuit Court of Appeals. After the Appellees moved to convert the Debtor's case to one under Chapter 7, the Debtor instructed his attorney to dismiss his bankruptcy case. His Chapter 13 case was voluntarily dismissed on May 20, 2008, pursuant to 11 U.S.C. § 1307(b).

On March 27, 2009, the Appellees moved the United States District Court for the Central District of California for permission to sell the Debtor's copyrights to satisfy their judgment. A hearing was scheduled on their motion to sell for April 20, 2009. On April 13, 2009, the Debtor pro se, filed his third petition for relief under Chapter 13. On April 30, 2009, the Debtor retained attorney Joe Weyant (“Weyant”) to represent him in this Chapter 13 case.

Shortly after filing his third Chapter 13 case, the Debtor filed numerous motions and adversary complaints including a complaint against BMI in which he sought turnover of $20,998.53 in royalties which BMI was holding. On June 15, 2009, the bankruptcy court ordered that the Debtor was entitled to exempt and receive $2,300 of the funds subject to the turnover complaint. The court set a final hearing for July 27, 2009, to determine how the remaining funds held by BMI should be distributed.

On May 11, 2009, the Appellees filed their proof of claim in the Debtor's bankruptcy case. The amount of their claim as of the date the bankruptcy case was filed was $52,171.86. The proof of claim filed by the Appellees stated that it was based upon the California judgment, and provided a detailed calculation of how the...