Bruce v. Remick
Filing
16
OPINION AND ORDER: The Bankruptcy Court's Order Denying Confirmation and Dismissing Case [4-2] and Order Denying Motion for Reconsideration [4-3] are AFFIRMED. The Clerk is directed to transmit a copy of this Order to the Bankruptcy Court and close this case. Signed by Senior Judge Charlene Edwards Honeywell on 3/15/2024. (SLB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
ALICE MARIE BRUCE,
Appellant,
v.
Case No: 8:23-cv-798-CEH
Bankr. No. 8:21-bk-6275-RCT
KELLY REMICK,
Chapter 13 Standing Trustee,
Appellee.
___________________________________/
OPINION AND ORDER
This matter is before the Court on appeal from the United States Bankruptcy
Court for the Middle District of Florida. Alice Marie Bruce (“Appellant”), proceeding
pro se, seeks review of the Bankruptcy Court’s Order Denying Confirmation and
Dismissing Case (Doc. 4-2) and Order Denying Reconsideration (Doc. 4-3). The
appeal is fully briefed, and the Court held oral argument on February 8, 2024.
Appellant did not appear at the hearing.
Upon due consideration of the record, the parties’ submissions, governing legal
authority, and otherwise being fully advised in the premises, the Court concludes that
the Bankruptcy Court’s Orders should be affirmed.
I.
BACKGROUND
Appellant owns real property located at 867 Hanover Way, Lakeland, FL 33813
(the “Hanover Way property”), which is her primary residence. Appellant also claims
ownership or an ownership interest in real property located at 3528 W. Shell Point
Rd., Ruskin, FL, 33570 (the “W. Shell Point Rd. property”). U.S. Bank, N.A., and/or
its servicing agents, filed foreclosure actions in state court as to each property before
Appellant initiated the bankruptcy action that is the subject of this appeal.
On December 15, 2021, Appellant, proceeding pro se, filed a voluntary petition
for relief under Chapter 13 of the United States Bankruptcy Code (“Bankruptcy Code”
or the “Code”) in the United States Bankruptcy Court for the Middle District of
Florida, Tampa Division, which was assigned Case No. 8:21-bk-6275-RCT. 1 Doc. 48. The petition did not list Appellant’s creditors, and Appellant did not submit a
proposed Chapter 13 Plan.
On December 16, 2021, the Bankruptcy Court entered its Administrative Order
Prescribing Procedures for Chapter 13 Cases. Doc. 4-11. Among other things, it
ordered that payments under the Chapter 13 Plan (the “Plan”) shall include all
payments to secured creditors that will come due after the petition is filed as follows:
a.
c.
For claims secured by real or personal property that are valued in
the Plan, the monthly Plan payment shall include adequate
protection payments based upon the proposed value of the
collateral with interest.
***
For executory contract or lease claims for real or personal
property, the monthly Plan payment shall include adequate
protection payments equal to the regular monthly
contractual payment. If there are prepetition arrearages, the Plan
shall provide for the prompt cure of arrearages.
***
The case was assigned to U.S. Bankruptcy Judge Michael G. Williamson. On November 8,
2022, the case was reassigned to U.S. Bankruptcy Judge Roberta A. Colton.
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2
f.
For claims secured by mortgages for which the Plan proposes to
cure prepetition arrearages, the Plan payment shall include the
regular post-petition contractual payment and the total arrearages
paid in monthly installments over the term of the Plan.
Id. at 2. The Administrative Order cautioned that “Debtor’s failure to timely make
payments to the Chapter 13 Trustee (the “Trustee”) or to comply with any of the
other requirements of this Order may result in dismissal or conversion of the case.”
Id. at 1.
On January 26, 2022, the Bankruptcy Court dismissed Appellant’s case without
prejudice for failure to file a proposed Plan. Doc. 4-28. Two days later, Appellant filed
a motion to reinstate the case and a proposed Plan using an incorrect form. Docs. 431, 4-32. In the proposed Plan, Appellant listed U.S. Bank as a creditor on two claims
secured by real property, namely, the properties located on Hanover Way and W. Shell
Point Rd. Doc. 4-31 at 3. Appellant proposed a claim amount of $11,000 for the
Hanover Way property, a claim amount of $15,000 for the W. Shell Point Rd.
property, and a monthly Plan payment of $100 and $50, respectively, to be disbursed
by the Trustee. Id. Appellant also listed Westlake Financial Auto as a creditor but
indicated that it was not included in the monthly Plan payment because she would pay
it directly. Doc. 4-31 at 2. On February 1, 2022, the Bankruptcy Court granted
Appellant’s motion to reinstate the case, extended certain deadlines, and set an initial
confirmation hearing for May 28, 2022. Doc. 4-23.
On February 7, 2022, Secured Creditor U.S. Bank, N.A., as Trustee, Successor
in Interest to Bank of America, N.A., as Trustee, Successor by merger to LaSalle Bank,
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N.A., as Trustee for Washington Mutual Asset-Backed Certificates WMABS Series
2006-HE3 Trust (“U.S. Bank”), filed its objection to confirmation of Appellant’s Plan.
Doc. 4-39. U.S. Bank asserted that its claim was secured only by a first mortgage
security interest encumbering the Hanover Way property. Id. Three days later, U.S.
Bank filed Proof of Claim No. 5 in the total amount of $719,126.51, showing arrears
in the amount of $203,877.27, to evidence the mortgage debt secured by the Hanover
Way property. Doc. 4-80. Appellant objected to U.S. Bank’s Proof of Claim No. 5,
asserting several reasons why the debt was invalid. Doc. 4-48. The Bankruptcy Court
overruled Appellant’s objection without prejudice to her raising her objections as
defenses in the foreclosure action. Doc. 4-131.
On March 5, 2022, Appellant filed an adversary complaint against U.S. Bank
challenging the validity of the debt secured by the Hanover Way property. See Bankr.
No. 8:22-ap-00052-MGW.
On March 28, 2022, the Bankruptcy Court held the initial confirmation hearing.
Doc. 4-79. The Bankruptcy Court continued the confirmation hearing to May 23,
2022, stating that it would also address Appellant’s objection to U.S. Bank’s claim at
that time. Doc. 4-96, 4-97.
On April 6, 2022, Appellant filed a first amended Plan using the correct form.
Doc. 4-89. The Plan was dated March 31, 2022. 2 Id. Appellant listed the same creditors
as those listed in her initial Plan, but she did not provide an amount, if any, that was
Appellant also filed an amended Plan on April 6, 2022, that was dated April 1, 2022. Doc.
4-90. That Plan was later stricken. See Doc. 4-130 at 2.
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to be paid to U.S. Bank through the Plan. Id. at 3-4. However, in another section of
the first amended Plan, Appellant indicated she would make monthly Plan payments
of $490.29 to the Trustee for a sixty-month period beginning on an unknown
month/year through February 2024. Id. at 2. Appellant did not specify what funds the
Trustee would distribute to which creditor.
On May 23, 2022, the Bankruptcy Court held the first continued confirmation
hearing. Doc. 4-130. The Bankruptcy Court overruled Appellant’s objection to U.S.
Bank’s Claim No. 5 for the reasons stated on the record at the hearing. Doc. 4-131.
The objection was overruled without prejudice to Appellant to raise her objections as
defenses in the foreclosure action. Id. The confirmation hearing was continued to
August 8, 2022. Doc. 4-133.
On
August 4, 2022, the
Trustee filed
an Amended Unfavorable
Recommendation and Objection Concerning Confirmation of the Plan. Doc. 4-149.
The Trustee reported that an amended plan was needed because Appellant’s Plan was
unclear as to the treatment of the creditors, failed to provide for treatment of U.S.
Bank, and failed to provide for adequate protection payments to U.S. Bank for the two
mortgages as required by the Bankruptcy Court’s Administrative Order. Id. at 2.
On July 28, 2022, the bankruptcy judge presiding over Appellant’s adversary
proceeding held a hearing on U.S. Bank’s motion to dismiss the adversary complaint.
During the hearing, the bankruptcy judge stated:
5
Now, this collateral attack on a foreclosure case is not proper. The
foreclosure case belongs in foreclosure. And you would raise all of these
same arguments that you make here, you would raise th[em] there. 3
Doc. 4-171 at 8. The bankruptcy judge advised Appellant that if she intended to pursue
the matter in bankruptcy, her remedy “would be to do a cure-and-pay plan” with
respect to the Hanover Way property Id. at 10. The bankruptcy judge granted U.S.
Bank’s motion to dismiss because Appellant had raised no arguments other than
defenses to the state court foreclosure action, which properly belonged in that state
court proceeding. The bankruptcy judge also sua sponte partially lifted the automatic
stay in the main bankruptcy case to allow the foreclosure action to proceed and to
allow Appellant to raise her defenses in state court. Id. The bankruptcy judge set forth
her rulings in a written order dated August 5, 2022, and the order was docketed in
Appellant’s bankruptcy case. Doc. 4-155.
On August 8, 2022, the second continued confirmation hearing was held as
scheduled. Doc. 4-156. The confirmation hearing was continued to October 3, 2022.
Doc. 4-163.
On August 12, 2022, Appellant filed a motion asking the Bankruptcy Court to
reconsider the bankruptcy judge’s partial lifting of the automatic stay. Doc. 4-160. The
only basis Appellant asserted for reconsideration was that she had filed a new
adversary complaint challenging the validity of U.S. Bank’s mortgage lien on the
Appellant obtained a transcript of this hearing and a hearing held by the Bankruptcy Court
on August 22, 2022, and it is part of the record on appeal. Doc. 4-171.
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property and the amount owed on the debt, if any. Id. Appellant asked the Bankruptcy
Court to reconsider the order pending the outcome of the adversary proceeding. Id.
On August 22, 2022, the Bankruptcy Court held a hearing on Appellant’s
motion for reconsideration. Doc. 4-171 at 13, 18-22. The Bankruptcy Court denied the
motion, finding that Appellant’s second adversary complaint raised the same defenses
to foreclosure as those raised in her first adversary complaint. 4 Id. at 21-22; Doc. 4166.
On October 3, 2022, the third continued confirmation hearing was held as
scheduled. Doc. 4-184. By written order dated October 27, 2022, the Bankruptcy Court
continued the confirmation hearing to December 5, 2022, and instructed Appellant to
file, prior to that hearing, an amended Plan that addressed all creditors with secured
claims and any motions to determine secured status that she believed were necessary.5
Id.
On November 29, 2022, Appellant filed a second amended Plan dated
November 3, 2022. Doc. 4-190. Appellant listed U.S. Bank as the creditor on the
Hanover Way and W. Shell Point Rd. properties, omitted creditor Westlake Financial
Auto, and added creditor Badcock’s Furniture. Id. at 3, 4, 6. She proposed making
Appellant appealed the Bankruptcy Court’s denial of her motion for reconsideration and the
bankruptcy judge’s underlying order. On September 29, 2023, the district court affirmed both
orders. See Case No. 8:22-cv-2201-TPB, Doc. 31.
4
A Chapter 13 debtor may file a motion to determine the secured status of a creditor’s claim
under 11 U.S.C. § 506(a) and Fed. R. Bankr. P. 3012. After that, the bankruptcy court may
determine the amount of a secured claim under § 506(a) of the Code, or the amount of a claim
entitled to priority under § 507 of the Code. See Fed. R. Bankr. P. 3012.1.
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monthly Plan payments of $490.29 to the Trustee for a sixty-month period. Id. at 2.
Appellant did not specify what funds the Trustee would distribute to which creditor,
and, inexplicably, she reported the monthly payments would be made over a twentyfour-month period from November 2021 to November 2023. Id. Appellant proposed
that she cure pre-petition arrears and maintain contractual payments on U.S. Bank’s
claim secured by her primary residence on Hanover Way, but she specifically provided
for no payment through the Plan for pre-petition arrears or post-petition mortgage
payments. Id. at 3. Regarding U.S. Bank’s claim secured by the W. Shell Point Rd.
property, Appellant proposed that she would file a motion to determine secured status
or value it at one dollar and provide no payment through the Plan. Id. at 4. As for
Badcock’s Furniture, Appellant proposed paying its claim in full outside of the Plan.
Id. at 6. Appellant did not propose an amount to be distributed to allowed general
unsecured claims filed in the case.
On December 3, 2022, Appellant filed a third amended Plan. Doc. 4-197.
However, this filing was identical to Appellant’s second amended Plan, including
being dated November 3, 2022. Compare Doc. 4-197 with Doc. 4-190.
On December 5, 2022, the fourth continued confirmation hearing was held as
scheduled. 6 After the hearing, but before the Bankruptcy Court issued a written order
on the hearing, Appellant filed a fourth amended Plan on December 7, 2022, and a
fifth amended Plan on December 13, 2022. Docs. 4-204, 4-214. However, these filings
Appellant did not file a motion to determine the secured status of the W. Shell Point Rd.
property prior to, or after, the fourth continued confirmation hearing.
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also were identical to Appellant’s second amended Plan, including being dated
November 3, 2022. Compare Docs. 4-204, 4-214 with Doc. 4-190. Appellant simply
filed the same Plan four times.
On December 9, 2022, Secured Creditor U.S. Bank, N.A., as Trustee, Successor
in Interest to Bank of America, N.A., as Trustee, Successor by Merger to LaSalle Bank,
N.A., as Trustee for Structured Asset Securities Corporation Mortgage Pass Through
Certificates, Series 2005-NC1 (“US Bank II”) moved for relief from the automatic stay
with respect to its foreclosure action involving the W. Shell Point Rd. property. U.S.
Bank II asserted that the amount owed on the property far outweighed its value, and
no payment for the property was included in Appellant’s Plan. Doc. 4-208.
On December 15, 2022, the Bankruptcy Court issued an order on the fourth
continued confirmation hearing. Doc. 4-216. The Bankruptcy Court denied
confirmation of Appellant’s amended Plan, 7 finding that it could not be confirmed
“based on the facts orally stated in open Court.” Id. at 1, 2. The Bankruptcy Court
determined that Appellant’s case should be set for a Final Confirmation Hearing, at
which time it would either confirm Appellant’s Plan or dismiss or convert her case. Id.
at 1. The Bankruptcy Court scheduled the Final Confirmation Hearing for February
8, 2023, ordering, in relevant part, that:
2.
An Amended Chapter 13 Plan must be filed within twenty-one
(21) days from the date this Order is entered providing for
payments to creditors and for a Plan term of at least thirty-six (36)
The order does not include a record citation to the amended Plan, i.e., whether it was
Appellant’s second, third, fourth, or fifth amended Plan. However, since those amended Plans
are identical, the omission of a record citation is immaterial.
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5.
6.
months, but no longer than sixty (60) months, or the Chapter 13
Trustee may submit an order dismissing this Chapter 13 Case
without further notice or hearing of this Court.
***
. . . THIS IS THE FINAL CONTINUANCE FOR
CONFIRMATION IN THIS CASE. . . .
At least fourteen (14) days prior to the Final Confirmation
Hearing, the Debtor shall correct any deficiencies or address
outstanding issues identified in the Chapter 13 Trustee’s Amended
Unfavorable Recommendation and Objection Concerning
Confirmation of the Plan [Doc. 4-149] or previously raised by the
Court or the Trustee’s office concerning confirmation of Debtor’s
plan. This requirement necessarily includes providing any
documents or other items requested by the Chapter 13 Trustee’s
office. The Debtor shall comply with the specific provisions for
paragraphs 2, 3 and 4 above as stated.
Id. at 2. Appellant did not file an amended Chapter 13 Plan within 21 days of the
Bankruptcy Court’s Order or at any time thereafter. Nor is there any indication in the
bankruptcy docket that Appellant requested additional time to file an amended Plan.
On December 30, 2022, U.S. Bank II objected to confirmation of the fifth
amended Plan (Doc. 4-214), asserting that Appellant did not own the W. Shell Point
Rd. property, the amended Plan did not provide for any payment on the debt, and
Appellant’s bankruptcy action was not filed in good faith. Doc. 4-219.
On January 11, 2023, the Bankruptcy Court issued an order granting U.S. Bank
II’s motion for relief and terminating the automatic stay as to its interest in the W.
Shell Point Rd. property. Doc. 4-223. Appellant sought reconsideration of the order,
asserting that the lien had been satisfied and she intended to file an adversary
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complaint against U.S. Bank II for violating the automatic stay. 8 Doc. 4-226. On
January 31, 2023, the Bankruptcy Court denied Appellant’s motion for
reconsideration. Doc. 4-227.
On February 8, 2023, the final confirmation hearing was held as scheduled.
Doc. 4-234. Appellant appeared at the hearing.
On February 14, 2023, the Bankruptcy Court issued an Order Denying
Confirmation and Dismissing Case. Doc. 4-2. The order reflects that the Bankruptcy
Court denied confirmation of Appellant’s fifth amended Plan (Doc. 4-214). See Doc.
4-3. The Bankruptcy Court dismissed Appellant’s case without prejudice, finding that
dismissal was “in the best interests of creditors and the estate.” Doc. 4-2.
Appellant sought reconsideration of that order. Doc. 4-236. As grounds, she
stated that she had filed an adversary complaint on January 24, 2023, to determine the
validity of U.S. Bank II’s claim on the W. Shell Point Rd. property and the amount
owed on that debt, if any. Id. The Bankruptcy Court denied Appellant’s motion,
finding that reconsideration was not warranted because Appellant failed to address,
much less meet, the standard for reconsideration as she did not allege a change in
controlling law, newly discovered evidence, or any error in denying confirmation or
dismissing the bankruptcy case, and she did not claim any manifest injustice. Doc. 4-
Appellant filed an adversary complaint against U.S. Bank II on January 24, 2023,
challenging the validity of the mortgage lien on the W. Shell Point Rd. property. The
bankruptcy judge abstained from ruling on the merits of the complaint, and, as it had done
twice before, dismissed the complaint without prejudice to Appellant to assert her claims as
defenses in the foreclosure action. See Case No. 8:23-ap-00015-RCT, Doc. 6.
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3 at 2. The Bankruptcy Court further found that Appellant essentially was asking it to
retain jurisdiction over the adversary proceeding notwithstanding the dismissal of her
bankruptcy action, which it declined to do because Appellant initiated the proceeding
as an alternative forum in which to litigate her state law claims against U.S. Bank II,
not because she had a sincere desire to reorganize her debts. Id. at 2, 3.
On March 21, 2023, Appellant filed a Notice of Appeal of the Bankruptcy
Court’s Order Denying Confirmation and Dismissing Case and Order Denying
Motion for Reconsideration. Doc. 4-1. Appellant designated the “entire case docket”
as the items to be included on the record of appeal. Doc. 4-5. Appellant did not request
or obtain transcripts of the fourth continued confirmation hearing on December 5,
2022, or the final confirmation hearing on February 8, 2023, to include in the appellate
record.
II.
STANDARD OF REVIEW
District courts have jurisdiction to hear appeals from final judgments, orders,
and decrees of bankruptcy courts. 28 U.S.C. § 158(a). A district court functions as an
appellate court in reviewing decisions of the bankruptcy court. See In re Colortex Indus.,
Inc., 19 F.3d 1371, 1374 (11th Cir. 1994). The district court reviews the bankruptcy
court’s legal conclusions de novo and findings of fact for clear error. In re Globe Mfg.
Corp., 567 F.3d 1291, 1296 (11th Cir. 2009). “A factual finding 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.” Morrissette-Brown v. Mobile Infirmary Med. Ctr., 506 F.3d 1317, 1319 (11th
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Cir. 2007) (internal quotation marks omitted). The party seeking to reverse the
bankruptcy court’s finding bears the burden of showing clear error. Qadan v. Fla. Prop.
Grp. Assocs., 591 B.R. 796, 808 (M.D. Fla. 2018) (citing In re Caribbean K Line, Ltd., 288
B.R. 908, 911 (S.D. Fla. 2002)).
The bankruptcy court’s equitable determinations are reviewed for an abuse of
discretion. In re Kingsley, 518 F.3d 874, 877 (11th Cir. 2008). Under this standard, the
reviewing court must affirm unless it finds that the bankruptcy court made a clear error
of judgment or applied an incorrect legal standard. Id. (citations and quotation marks
omitted). The bankruptcy court’s dismissal for cause is an equitable determination
reviewed for an abuse of discretion. See In re Piazza, 719 F.3d 1253, 1271 (11th Cir.
2013) (reviewing Chapter 7 dismissal “for cause” under statute that contains similar
operative language to the “for cause” dismissal provision in Chapter 13); In re
Echeverry, 720 F. App’x 598, 599 (11th Cir. 2018) 9 (reviewing Chapter 13 dismissal
“for cause” pursuant to In re Piazza). The bankruptcy court’s denial of a motion for
reconsideration also is reviewed for an abuse of discretion. In re Int’l Yacht & Tennis,
Inc., 922 F.2d 659, 662 n.6 (11th Cir. 1991); Qadan, 591 B.R. at 813.
III.
ANALYSIS
Construed liberally, Appellant raises two main issues on appeal: (1) whether the
Bankruptcy Court abused its discretion in dismissing Appellant’s bankruptcy case for
Unpublished opinions are not binding precedent, but they may be cited as persuasive
authority. See 11th Cir. R. 36-2; United States v. Futrell, 209 F.3d 1286, 1289 (11th Cir. 2000).
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cause; and (2) whether the Bankruptcy Court abused its discretion in denying
Appellant’s motion for reconsideration. Each issue is addressed in turn.
A.
Dismissal of Appellant’s Chapter 13 Bankruptcy
Appellant argues that the Bankruptcy Court erred in dismissing her case for two
reasons. First, Appellant contends that the Bankruptcy Court clearly erred by denying
confirmation of her fifth amended Plan for failing to provide treatment for the secured
claims of U.S. Bank and U.S. Bank II. According to Appellant, the record
demonstrates that her fifth amended Plan provided non-monetary treatment for the
secured claims by seeking judgments in adversary to determine the amount secured by
U.S. Bank’s and U.S. Bank II’s mortgage liens, and that after those determinations
were made, Appellant would amend her Plan to provide monetary treatment for their
secured claims. Doc. 12 at 7. Second, Appellant contends that the Bankruptcy Court
misapplied the portion of the Bankruptcy Code that authorizes a bankruptcy court to
dismiss a Chapter 13 case because the Bankruptcy Court did not cite any of the
permissible circumstances listed in the Code in its Order Denying Confirmation and
Dismissing Case. Doc. 12 at 7-8.
The Trustee responds that there is no record evidence showing that the
Bankruptcy Court erred by denying confirmation of Appellant’s fifth amended Plan
because the Plan did not meet the requirements of 11 U.S.C. §§ 1322 and 1325.
Specifically, the Trustee contends the fifth amended Plan did not provide for treatment
for U.S. Bank’s secured claim as required by § 1332(e) because it proposed to cure prepetition arrears and make post-petition mortgage payments but proposed no monetary
14
amount to do so, and it did not provide for treatment of U.S. Bank II’s secured claim
as required by § 1325(a)(5) because it proposed an estimated value of the claim
($450,000) but proposed no payment on the estimated value. As for Appellant’s
assertion that her Plan provided for treatment of both secured claims by seeking
determinations in adversary, the Trustee argues that the Plan does not reflect that
intention and the Plan would not be confirmable even if it did. Doc. 13 at 12, 13.
Appellant fails to demonstrate that the Bankruptcy Court clearly erred by
denying confirmation of the fifth amended Plan for failing to provide treatment for the
secured claims of U.S. Bank and U.S. Bank II. 10 Section 1325 of the Bankruptcy Code
requires one of three alternative treatments for a secured creditor whose claim is
included in a Chapter 13 plan: treatment to which the secured creditor consents;
treatment by which the debtor pays towards the secured creditor’s lien while the
creditor retains its security; or treatment by way of the debtor surrendering the property
to the secured creditor. 11 U.S.C. § 1325(a)(5); Woodroffe v. Waage, No. 8:18-cv-1437T-36, 2019 WL 4644425, at *4 (M.D. Fla. Sept. 24, 2019). In this case, Appellant’s
fifth amended Plan did not provide for treatment to which U.S. Bank and U.S. Bank
II consented, it did not provide for payment towards the liens on the Hanover Way
The Court notes that the Bankruptcy Court’s Order Denying Confirmation and Dismissing
Case does not state why Appellant’s fifth amended Plan was denied confirmation or why
Appellant’s case was dismissed. However, its reason for both is reflected in its Order Setting
Final Confirmation Hearing. Therein, the Bankruptcy Court advised Appellant that her
amended Plan must provide for payments to creditors and include a payment term of thirtysix to sixty months, and that her case would be subject to dismissal if it did not. Doc. 4-216
at 2.
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and W. Shell Point Rd. properties, and it did not provide for Appellant to surrender
the properties to U.S. Bank and U.S. Bank II. Because the fifth amended Plan failed
to comply with § 1325(a)(2)’s requirements that a plan provide for specified treatment
of secured creditors, the Bankruptcy Court did not err in the manner alleged. As for
Appellant’s contention that her fifth amended Plan provided non-monetary treatment
for the secured claims and would have been amended to provide for monetary
treatment of the claims, the Court finds the contention is not well-taken. Nothing in
the fifth amended Plan supports a finding that Appellant intended to treat the claims
in that manner, and Appellant cites no evidence demonstrating that it was her
intention to do so. Moreover, Appellant was on notice that doing so was
impermissible. The bankruptcy judge informed Appellant that her adversary claims
challenging the validity of the mortgage liens on the Hanover Way and W. Shell Point
Rd. properties were improper collateral attacks on the state court foreclosure actions
that would not be heard in adversary or in her bankruptcy case. 11 See Doc. 4-171 at 811, 19-22.
The Bankruptcy Court did not abuse its discretion in dismissing Appellant’s
case. The Bankruptcy Court dismissed the case because Appellant failed to submit an
amended Plan that provided payment to secured creditors U.S. Bank and U.S. Bank
II. Section 1307(c) of the Bankruptcy Code provides that “on request of a party in
To the extent Appellant contends the Bankruptcy Court clearly erred in denying
confirmation of her fifth amended Plan because no objections were made to the Plan (see Doc.
12 at 6), Appellant is incorrect. U.S. Bank II objected to confirmation of the fifth amended
Plan on December 30, 2022. Doc. 4-214.
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interest or the United States trustee 12 and after notice and a hearing, the court may
convert a case under this chapter to a case under chapter 7 of this title, or may dismiss
a case under this chapter, whichever is in the best interests of creditors and the estate,
for cause[.]”11 U.S.C. § 1307(c). It also provides a non-exhaustive list of circumstances
that constitute “for cause,” including the failure to file a plan timely, and the denial of
confirmation of a plan and the denial of a request for additional time to file another
plan. Id. at § 1307(c)(3), (5). On December 15, 2022, the Bankruptcy Court ordered
Appellant to file an amended Plan within twenty-one days that provided for payments
to creditors and a Plan term of thirty-six to sixty months. Doc. 4-216 at 2. Appellant
did not timely file an amended Plan within that period; nor did she file an amended
Plan at any time thereafter. Additionally, the Bankruptcy Court denied confirmation
of Appellant’s fifth amended Plan, and Appellant did not request additional time to
file another amended Plan.
A bankruptcy court may dismiss a case sua sponte under 11 U.S.C. § 105(a). See In re Tennant,
318 B.R. 860, 869 (9th Cir.2004) (“Section 105(a) makes ‘crystal clear’ the court’s power to
act sua sponte where no party in interest or the Unites States trustee has filed a motion to
dismiss a bankruptcy case.”); see also In re C-TC 9th Ave. P’ship, 113 F.3d 1304, 1312 (2d
Cir.1997) (“When the record is sufficiently well developed to allow the bankruptcy court to
draw the necessary inferences to dismiss a Chapter 11 case for cause, the bankruptcy court
may do so.”). Section 105(a) of the Bankruptcy Code states, in relevant part, that “[n]o
provision of this title providing for the raising of an issue by a party in interest shall be
construed to preclude the court from, sua sponte, taking any action or making any
determination necessary or appropriate to enforce or implement court orders or rules, or to
prevent an abuse of process.” 11 U.S.C. § 105(a). The Court notes that the Eleventh Circuit
has held that a bankruptcy court lacks authority sua sponte to dismiss a Chapter 11 case, except
for a case “‘with demonstrably frivolous purposes absent any economic reality.’” In re Moog,
774 F.2d 1073, 1076 (11th Cir. 1985). However, the Eleventh Circuit decided that case prior
to the 1986 amendments to § 105(a), and thus, it is inapposite.
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The record also supports dismissal based on Appellant’s unreasonable delay
that was prejudicial to creditors under § 1307(c)(1). Here, Appellant had not confirmed
a Chapter 13 Plan within 14 months despite having filed seven Plans, one of which
was stricken. A debtor’s inability to confirm a Chapter 13 plan for an extended period
of time has been found to be unreasonable delay that is prejudicial to creditors
justifying dismissal under section 1307(c). See In re Addams, 564 B.R. 458, 466-67
(Bankr. E.D.N.Y. 2017) (finding unreasonable delay where a debtor had not
confirmed a Chapter 13 plan within 15 months); In re Blanco, 520 B.R. 476, 483 (Bankr.
E.D. Pa. 2014) (“[T]here is no legitimate purpose for a debtor to remain in chapter 13,
and thereby restrain creditors from exercising their rights under applicable nonbankruptcy law, if the debtor, after given fair opportunity to do so, has been unable to
propose a chapter 13 plan that meets the confirmation requirements of 11 U.S.C.
§ 1322 and § 1325.”).
B.
Denial of Appellant’s Motion for Reconsideration
Appellant argues that the Bankruptcy Court abused its discretion in denying her
motion for reconsideration because it “maintained its error by determining that the
plan did not provide for treatment of the claims.” Doc. 12 at 9. Appellant’s argument
is without merit.
“A motion for reconsideration must demonstrate why the court should
reconsider its prior decision and ‘set forth facts or law of a strongly convincing nature
to induce the court to reverse its prior decision.’” Fla. Coll. of Osteopathic Med., Inc. v.
Dean Witter Reynolds, Inc., 12 F. Supp. 2d 1306, 1308 (M.D. Fla. 1998) (quoting Cover
18
v. Wal–Mart Stores, Inc., 148 F.R.D. 294, 295 (M.D. Fla. 1993)). Courts generally
recognize three grounds justifying reconsideration: (1) an intervening change in
controlling law; (2) the availability of new evidence; and (3) the need to correct clear
error or manifest injustice. Id. A motion for reconsideration should not be used to
present the Court with arguments already heard and dismissed, or to offer new legal
theories or evidence that could have been presented prior to the entry of judgment. See
Arthur v. King, 500 F.3d 1335, 1343-44 (11th Cir. 2007); O’Neal v. Kennamer, 958 F.2d
1044, 1047 (11th Cir. 1992).
The Bankruptcy Court did not abuse its discretion by denying Appellant’s
motion for reconsideration. Appellant presents no evidence of an intervening change
in controlling law, the availability of new evidence, or the need to prevent manifest
injustice. To the extent Appellant argues reconsideration is warranted to correct clear
error, the Court has found that the Bankruptcy Court did not clearly error by finding
that Appellant’s fifth amended Plan failed to provide treatment for the secured claims
of U.S. Bank and U.S. Bank II, and Appellant alleges no other errors.
For the reasons stated above, Appellant has not shown that the Bankruptcy
Court abused its discretion or committed any error in denying confirmation of
Appellant’s fifth amended Plan, dismissing Appellant’s bankruptcy case, and denying
reconsideration of the same.
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Accordingly, it is hereby ORDERED AND ADJUDGED:
1.
The Bankruptcy Court’s Order Denying Confirmation and Dismissing
Case (Doc. 4-2) and Order Denying Motion for Reconsideration (Doc. 4-3) are
AFFIRMED.
2.
The Clerk is directed to transmit a copy of this Order to the Bankruptcy
Court and close this case.
DONE and ORDERED in Tampa, Florida on March 15, 2024.
Copies furnished to:
Alice Marie Bruce, 867 Hanover Way, Lakeland, FL 33813
Counsel of Record
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