Dalton v. Warfield

Filing 4

ORDER - Granting the Motion to Withdraw the Reference from the United States Bankruptcy Appellate Panel of the Ninth Circuit for the Limited Purpose of Ruling on Appellant/Debtors Motion to Proceed in Forma Pauperis (Doc. 1 ) and granting pro se Appellant Harry Delbert Dalton's Application to Proceed in Court Without Prepaying Fees or Costs (Doc. 1 at 3-7). IT IS FURTHER ORDERED directing the Clerk of this Court to close this matter. Signed by Judge John J Tuchi on 01/04/2018. (KAS)

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NOT FOR PUBLICATION

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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IN THE MATTER OF:

No. CV-17-04790-PHX-JJT

Harry Delbert Dalton,

BAP NO. AZ-17-1310

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Debtor.

BK NO. 0:17-bk-06058-PS

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Harry Delbert Dalton,
Appellant,

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ORDER

v.
Lawrence J. Warfield,
Chapter 7 Trustee,
Appellee.

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At issue is the Motion to Withdraw the Reference from the United States

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Bankruptcy Appellate Panel of the Ninth Circuit (“BAP”) for the Limited Purpose of

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Ruling on Appellant/Debtor’s Motion to Proceed in Forma Pauperis, filed by way of

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BAP’s Order Transferring Motion to United States District Court for Limited Purpose of

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Ruling on Motion Under 28 U.S.C. § 1915 (Doc. 1). In an action before BAP, pro se

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Appellant Harry Delbert Dalton filed an Application to Proceed in Court Without

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Prepaying Fees or Costs (Doc. 1 at 3-7). Upon this Court’s review of the Application, see

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Perroton v. Gray (In re Perroton), 958 F.2d 889 (9th Cir. 1992), the Court finds that

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Appellant does not have the means to pay BAP’s fees and will therefore grant the

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Application. Furthermore, upon screening the Notice of Appeal (Doc. 1 at 8-67, “NOA”)

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pursuant to 28 U.S.C. § 1915(e)(2), the Court cannot find that the appeal is frivolous or

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otherwise warrants dismissal at this juncture.

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For cases in which a party is permitted to proceed in forma pauperis—that is, the

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party lacks the means to pay court fees—Congress provided that a district court “shall

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dismiss the case at any time if the court determines” that the “allegation of poverty is

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untrue” or that the “action or appeal” is “frivolous or malicious,” “fails to state a claim on

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which relief may be granted,” or “seeks monetary relief against a defendant who is immune

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from such relief.” 28 U.S.C. § 1915(e)(2). Section 1915(e) applies to all in forma pauperis

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proceedings. Lopez v. Smith, 203 F.3d 1122, 1129 (9th Cir. 2000).

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Here, Appellant, the Debtor in the underlying bankruptcy proceeding, appeals the

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Bankruptcy Court’s October 13, 2017 Order approving the Trustee’s Motion to Approve

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Compromise, over Appellant’s objections. (Doc. 1 at 68-69, Order.) The compromise was

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an effort to resolve Appellant’s claim against Wade Atchison, an Allstate Insurance agent,

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for failing to notify Appellant of possible risks in changing his insurance policy and

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subsequently of a lapse in policy coverage. The Bankruptcy Court concluded that the

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proposed compromise—Mr. Atchison’s payment of $5,000 to the Trustee—was a

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reasonable exercise of the Trustee’s business judgment, otherwise reasonable, and in the

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best interest of the bankruptcy estate. (Order at 1.)

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In the Notice of Appeal, Appellant takes issue with the fairness of the approved

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compromise. (NOA at 2.) Without the benefit of the entire procedural history and briefing

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by the parties, the Court cannot conclude from the face of the Notice of Appeal that it is

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devoid of merit. Accordingly, the Court declines to dismiss the appeal under 28 U.S.C.

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§ 1915(e)(2).

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IT IS THEREFORE ORDERED granting the Motion to Withdraw the Reference

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from the United States Bankruptcy Appellate Panel of the Ninth Circuit for the Limited

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Purpose of Ruling on Appellant/Debtor’s Motion to Proceed in Forma Pauperis (Doc. 1).

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....

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....

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IT IS FURTHER ORDERED granting pro se Appellant Harry Delbert Dalton’s
Application to Proceed in Court Without Prepaying Fees or Costs (Doc. 1 at 3-7).

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IT IS FURTHER ORDERED directing the Clerk of this Court to close this matter.

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Dated this 4th day of January, 2018.

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Honorable John J. Tuchi
United States District Judge

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