Morris v. McAleer et al

Filing 22

Order AFFIRMING the order of the bankruptcy judge dated 12/15/14 denying the motion of David Glenn Morris to reconsider the dismissal of his Chapter 13 bankruptcy case as set out. Signed by Judge Callie V. S. Granade on 9/2/2015. (copy mailed to Appellant on 9/3/15) (tot)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
DAVID GLENN MORRIS,
Appellant,
vs.
DANIEL B. O’BRIEN, et al.,
Appellees.

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) CIVIL ACTION NO. 14-604-CG-B
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) Bankr. Case. No. 14-01944-MAM-13
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ORDER

This matter is before the court as an appeal from the bankruptcy court,
pursuant to 28 U.S.C. § 158.1 The parties have filed appellate briefs, which the
court has carefully reviewed. The Court has determined that the facts and legal
arguments are adequately presented in the briefs and the record and that the
decisional process would not be significantly aided by oral argument. As will be
explained below, this Court finds that the bankruptcy court did not err in deciding
to dismiss Appellant’s bankruptcy case and to deny Appellant’s motion to reconsider
that dismissal. As such, the decision of the U.S. Bankruptcy Court on appeal is due
to be affirmed.

The Court notes that the notice of appeal states that the appeal is under 158(a) or
(b). Under 158(a) an appeal is directed to the district court. Section 158(b) provides
that an appeal may be made to a bankruptcy appellate panel. Such panels, which
are typically created at the determination of each individual circuit, are comprised
of bankruptcy judges and replace the district court in the appellate chain unless one
of the parties opts to have the appeal heard by the district court instead. However,
the Eleventh Circuit has not established a bankruptcy appellate panel. Thus,
although the notice stated that it was under § 158(a) or (b), it is clear that the
appeal was to district court.
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I. Bankruptcy Court Decision
Appellant, David Glenn Morris, appeals from the judgment order or decree of
the bankruptcy judge dated December 15, 2014. (Doc. 1, p. 2). In the December 15,
2014 order, Judge Mahoney denied Morris’ motion to reconsider the dismissal of his
bankruptcy case. (Doc. 5, p. 380-382). Judge Mahoney stated that the facts were as
follows:
Mr. Morris filed this chapter 13 case pro se on June 16, 2014. He
has failed to file numerous documents required to be filed in a case. He
has not filed certificates of service as to many of the pleadings he has
filed. He has failed to file 2011, 2012 and 2013 federal tax returns
according to the IRS. Mr. Morris states he has filed them. He admits
he filed as a single person; but he is married. At a hearing on
December 3, 2014, he brought to court a divorce petition which he had
just filed. Mr. Morris was required to commence making chapter 13
payments in July 2014. His chapter 13 plan states that he will pay
$394.06 per month to creditors. At dismissal, he had made 2 payments
of 5. After dismissal, according to the documents attached to his
motion to reconsider, he had submitted 1 more payment. Even with
that payment, he was 2 payments behind.
The plan proposed by Mr. Morris was not confirmable as filed.
Technique Auto Sales had filed a valid objection to the plan; the
Chapter 13 Trustee opposed the plan due to lack of feasibility and lack
of payments; and the United States had filed a motion to dismiss the
case due to failure to file tax returns. On December 4, 2014, the Court
granted the motion of the United States to dismiss the case.
Mr. Morris filed his motion to reconsider on December 12, 2014.
Mr. Morris’ Motion to Reconsider states that he had made 3 payments
to the trustee. It also states he had paid the IRS.
(Doc. 5, pp. 377-378). Judge Mahoney found that even with an additional payment,
Mr. Morris was still at least two payments behind. (Doc. 5, p. 378). Judge Mahoney
also found that even if Morris had made payments to the IRS, he had still not filed
the proper returns for a married man. (Doc. 5, p. 378). Additionally, Morris’ plan
remained “unconfirmable due to the objections of the Chapter 13 Trustee and
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Technique Auto Sales.” (Doc. 5, p. 378). The bankruptcy judge then concluded that
Morris’ motion for reconsideration raised no issues that were not or could not have
been raised at the prior hearing and should therefore be denied without a hearing.
II. Standard of Review
A bankruptcy court's findings of fact are reviewed for clear error, and its legal
conclusions and any mixed questions of law and fact are reviewed de novo. Educ.
Credit Mgmt. v. Mosley (In re Mosley), 494 F.3d 1320, 1324 (11th Cir. 2007);
Christopher v. Cox (In re Cox), 493 F.3d 1336, 1340 n. 9 (11th Cir. 2007). “The
district court makes no independent factual findings,” but instead reviews “the
bankruptcy court's factual determinations under the ‘clearly erroneous' standard.”
In re Colortex Industries, Inc., 19 F.3d 1371, 1374 (11th Cir. 1994) (citation
omitted). 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.” Anderson v. City of Bessemer
City, N.C., 470 U.S. 564, 573 (1985) (citation, internal quotation marks, and
alterations omitted). As the reviewing court, this court must give “due regard to the
bankruptcy court's opportunity to judge the credibility of the witnesses.” In re
Englander, 95 F.3d 1028, 1030 (11th Cir. 1996). An appellate court may affirm the
lower court “where the judgment entered is correct on any legal ground regardless
of the grounds addressed, adopted or rejected” by the lower court. Bonanni Ship
Supply, Inc. v. United States, 959 F.2d 1558, 1561 (11th Cir. 1992).

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III. Discussion
In Mr. Morris’ appeal brief, he contends that the bankruptcy court did not
have jurisdiction when it dismissed his case because he had appealed an order of
the bankruptcy court and the bankruptcy court had therefore lost jurisdiction over
related matters. On July 25, 2014, the bankruptcy judge granted relief from the
stay to Federal Home Loan Mortgage Corporation. (Doc. 5, p. 228; Bankr. Doc. 47).
On July 31, 2014, Morris appealed the bankruptcy court’s relief from stay order.
(Doc. 5, p. 235; Bankr. Doc. 51). Morris’ appeal remained pending when his
bankruptcy case was dismissed on December 4, 2014, as well as when his motion to
reconsidered was denied on December 15, 2014. However, “proceedings in
bankruptcy should not halt merely because interlocutory orders are appealed.”
Futch v. Roberts (In re Roberts), 291 F. App'x 296, 298 (11th Cir. 2008) (quoting
Mavity v. Assoc. Disc. Corp., 320 F.2d 133, 136 (5th Cir. 1963)). “Instead, ‘a case
should continue to be adjudicated on the merits by [the bankruptcy court] unless
the order appealed from was of such a nature as to render further proceedings
useless.’ ” Id. (quoting Mavity supra). “The filing of a notice of appeal to a district
court divests a bankruptcy court of jurisdiction to proceed with matters raised by
such appeal but not as to matters that are ‘uniquely separable’ from and collateral
to the merits of the appeal.” State Farm Mutual Automobile Ins. Co. v. Brown (In re
Brown), 2007 WL 3326684, at *1 (M.D. Fla. Nov. 6, 2007) (citations omitted).
In the instant case, the appeal of the relief from stay did not render further
proceeding in Morris’ bankruptcy case useless. Morris’ bankruptcy case proceeded

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for more than four months after the appeal and was eventually dismissed based on
reasons collateral to the appeal. The merits of the appeal were unrelated to Morris’
continued failure to file numerous documents required to be filed in his case or his
failure to make the required payments under his Chapter 13 plan. This Court finds
that the bankruptcy court had jurisdiction to proceed with Morris’ case and to
ultimately dismiss his case while the appeal was still pending.
Morris also states that the “assigned trustee failed or refused to protect the
entrusted inventory estate of David Morris and all of David Morris’ inventory and
estate was liquidated or missing from the touch or domain of David Morris.” (Doc.
17, p. 1). Morris argues that “the Trustee did not have a judicial right to abandon
or do away with the inventory/estate assets of David Morris.” (Doc. 17, p. 2). It is
unclear what Morris is trying to say. Morris filed bankruptcy under Chapter 13.
His assets were not liquidated under Chapter 7. In a Chapter 13 bankruptcy,
unless otherwise provided in a confirmed plan, “the debtor shall remain in
possession of all property of the estate.” 11 U.S.C. § 11306(b). The Chapter 13
Trustee only receives plan payments from the debtor. See 11 U.S.C. §§ 1322(a)(1),
1326(a)(1)(A). The Trustee did not abandon or do away with property of Mr. Morris’
estate.
Morris cites to Federal Rules of Bankruptcy Procedure 7062 and 6004(h) and
then states that “staying the enforcement of an Order Pending Appeal is not only
understood in law but followed by honest and competent judicial official and
assigned Trustee.” Rule 7062 provides that an appellant may obtain a stay when an

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appeal is taken. See FED. R. BANKR. P. 7062(d)-(e). Morris had moved for a stay of
the order granting relief from stay to Federal Home Loan Mortgage Corporation,
which was denied on August 7, 2014. (Bankr. Docs. 54, 57). Morris did not appeal
the denial of his motion for stay and the time for appeal of that order has expired.
See FED.R.BANKR.P. 8002(a) (“Except as provided in subdivisions (b) and (c) [which
are not applicable here], a notice of appeal must be filed with the bankruptcy clerk
within 14 days after entry of the judgment, order, or decree being appealed.”).
Thus, although a stay may sometimes be obtained upon an appeal, Morris did not
obtain one here.
Rule 6004(h) states that “[a]n order authorizing the use, sale, or lease of
property other than cash collateral is stayed until the expiration of 14 days after
entry of the order, unless the court orders otherwise.” It is unclear how Morris
contends that this rule applies to his case. The Court finds it does not affect the
merits of the bankruptcy court’s dismissal of his case.
None of Morris’ arguments show that the bankruptcy court erred in
dismissing his bankruptcy case or in refusing to reinstate his case upon his motion
for reconsideration. Morris ignored numerous notices and orders from the court and
failed to comply with the requirements of Chapter 13 even though he was given
ample opportunity to correct the deficiencies. Morris’ continual failures constitute
“cause” for dismissal as they resulted in an “unreasonable delay by the debtor that
is prejudicial to creditors.” 11 U.S.C. § 1307(c)(1). There was also “cause” for
Morris’ case to be dismissed due to his “failure to commence making timely

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payments.” 11 U.S.C. § 1307(c)(4). Morris’ repeated failure to comply with rules and
orders of the bankruptcy court was good cause to dismiss his case. Because Morris
has not shown that the facts relied upon by the bankruptcy court were clearly
erroneous or that the court erred in dismissing his case and denying his motion to
reconsider the dismissal, the decision of the bankruptcy court should be affirmed.
IV. Conclusion
For the reasons stated above, the order of the bankruptcy judge dated
December 15, 2014, denying the motion of David Glenn Morris to reconsider the
dismissal of his Chapter 13 bankruptcy case, is hereby AFFIRMED.
DONE and ORDERED this 2nd day of September, 2015.
/s/ Callie V. S. Granade
UNITED STATES DISTRICT JUDGE

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