M.P.I. Ltd. Trust et al v. Hu et al

Filing 4

ORDER DENYING APPLICATION TO PROCEED IN FORMA PAUPERIS re 1 Signed by JUDGE DERRICK K. WATSON on 9/19/2017. "Accordingly, the Court finds that Kromer has not made the required showing under Section 1915 to proceed without prepa yment of fees, and DENIES his IFP Application. If Kromer wishes to proceed with this appeal, he must either (1) re-submit a fully executed IFP Application or (2) remit the appropriate filing fee by October 16, 2017. Failure to do so will r esult in the automatic dismissal of this action. 1. The Clerk of Court is DIRECTED to send Kromer a copy of this Order and the Court's Application to Proceed in forma pauperis with the accompanying information sheet. 2. Kromer i s GRANTED until October 16, 2017 to (a) pay the filing fee; or to (b) submit a completed and executed application to proceed in forma pauperis on the form provided by the court with this Order. 3. Failure to timely file an in forma pauperis application or to pay the applicable filing fee by October 16, 2017 will result in AUTOMATIC DISMISSAL of this action." (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). David Douglas Kromer served by first class mail to the address of record on September 19, 2017. A copy of the court's Application to Proceed in District Court Without Prepaying Fees of Costs shall be included in the mailing to Mr. Kromer.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI‘I

M.P.I. LTD. TRUST; DAVID
DOUGLAS KROMER, TRUSTEE,

CV. NO. 17-00460 DKW-KSC
Bankr. No. 17-00245

Appellants,
vs.
HOWARD M.S. HU, TRUSTEE, et al.,

ORDER DENYING APPLICATION
TO PROCEED IN FORMA
PAUPERIS

Appellees.

On September 13, 2017, one of the Appellants in this bankruptcy appeal,
David Douglas Kromer, Trustee, purportedly on behalf of Appellant M.P.I. Ltd.
Trust, filed in United States Bankruptcy Court, District of Hawaii: (1) a Notice of
Appeal And Statement Of Election, and (2) an Application To Proceed In District
Court Without Prepaying Fees Or Costs, seeking to proceed in forma pauperis on
appeal (“IFP Application”).1 Federal courts can authorize the commencement of
any suit without prepayment of fees or security by a person who submits an affidavit
that demonstrates he or she is unable to pay. See 28 U.S.C. § 1915(a)(1). “An

1

The Notice of Appeal and IFP Application were transmitted to this district court on September 14,
2017, and the instant civil action was opened on September 15, 2017. See Dkt. No. 1-1 (IFP
Application) and Dkt. No. 1-2 (Notice of Appeal). The IFP Application is properly before the
district court, rather than the bankruptcy court. See In re Perroton, 958 F.2d 889, 896 (9th Cir.
1992) (bankruptcy court lacks authority to waive fees under Section 1915(a)).

affidavit in support of an IFP application is sufficient where it alleges that the affiant
cannot pay the court costs and still afford the necessities of life.” Escobedo v.
Applebees, 787 F.3d 1226, 1234 (9th Cir. 2015) (citing Adkins v. E.I. Du Pont de
Nemours & Co., 335 U.S. 331, 339 (1948)); see also United States v. McQuade, 647
F.2d 938, 940 (9th Cir. 1981) (The affidavit must “state the facts as to affiant’s
poverty with some particularity, definiteness and certainty.”) (internal quotation
omitted).
When reviewing an application filed pursuant to Section 1915(a), “[t]he only
determination to be made by the court . . . is whether the statements in the affidavit
satisfy the requirement of poverty.” Martinez v. Kristi Kleaners, Inc., 364 F.3d
1305, 1307 (11th Cir. 2004). While Section 1915(a) does not require a litigant to
demonstrate absolute destitution, Adkins, 335 U.S. at 339, the applicant must
nonetheless show that he or she is “unable to pay such fees or give security therefor.”
28 U.S.C. § 1915(a).
Here, Kromer states in the IFP Application only that “fee waiver under Rules
for waiver of fees for a Trust state that has no money [sic],” and, that Kromer is
“applying in the capa[c]ity of the Trustee, not as an individual.” Although Kromer
did not complete the portions of the IFP Application indicating whether (1) he,
individually, (2) the Trust itself, or (3) any other applicant has any wages, other
income, or assets in support of his request, he does declare: “This is a Trust[.] [T]he
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Trust Estate has no money and because land lord did not check box as a residence
with guilty knowledge it was my home I got evicted with only the shirt on my back
and threat of arrest if I did not leave immediately.”
First, to the extent the IFP Application seeks to “waive fees for a Trust . . . that
has no money,” the request is denied. The statutory text of Section 1915(a)
provides that a court may authorize court proceedings without prepayment by a
“person” who is unable to pay the fees. 28 U.S.C. § 1915(a). The Supreme Court
has held that Section 1915 applies only to “natural persons,” and declined to extend
in forma pauperis status to other legal entities. Rowland v. Cal. Men’s Colony,
Unit II Men’s Advisory Council, 506 U.S. 194, 198–201 (1993) (observing that the
relevant congressional history lacked any indication Congress contemplated the
term “person” to include legal entities).2
Second, to the extent Kromer seeks to proceed without paying the costs of this
appeal, he fails to establish that he individually cannot pay the court costs and still
afford the necessities of life. See, e.g., 2017 HHS Poverty Guidelines,
https://www.federalregister.gov/documents/2017/01/31/2017-02076/annual-update

2

Moreover, the Court informs Kromer that only a licensed attorney may represent an entity such as
a corporation, partnership, association, or trust in federal court. See, e.g., C.E. Pope Equity Trust
v. U.S., 818 F.2d 696, 697 (9th Cir. 1987); see also Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385
(11th Cir. 1985) (stating the well-established rule that a fictional legal person such as a corporation
must be represented by a licensed attorney even when the non-attorney seeking to represent the
corporation is its president and major stockholder); Knoefler v. United Bank of Bismark, 20 F.3d
347, 348 (8th Cir. 1994) (holding that a nonlawyer trustee has no right to represent a trust pro se ).

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-of-the-hhs-poverty-guidelines (indicating that the poverty threshold for a
one-person household in Hawaii is $13,860).
Although Kromer makes vague allegations that the Trust is without assets and
that he has been evicted, the IFP Application is incomplete with respect to his
individual assets and liabilities. His declaration regarding Trust assets also appears
to be contradicted by his filings in the bankruptcy court.3 In sum, Kromer fails to
establish that he cannot both pay the costs of litigating this case “and still be able to
provide himself . . . with the necessities of life.” See Adkins, 335 U.S. at 339
(internal quotation marks omitted). Accordingly, the Court finds that Kromer has
not made the required showing under Section 1915 to proceed without prepayment
of fees, and DENIES his IFP Application. If Kromer wishes to proceed with this
appeal, he must either (1) re-submit a fully executed IFP Application or (2) remit the
appropriate filing fee by October 16, 2017. Failure to do so will result in the
automatic dismissal of this action.

3

The Court takes judicial notice of filings in the underlying Chapter 12 Bankruptcy. See
Fed.R.Evid. 201(b); In re Keahey, 414 F. App’x 919, 923 (9th Cir. 2011). Kromer as Trustee for
M.P.I. Ltd. Trust, on April 24, 2017, filed bankruptcy schedules and statements listing various
Trust assets in bankruptcy court that were not identified on the IFP Application, such as $40,000 in
accounts receivable, and other property worth hundreds of thousands of dollars. See Bankr. No.
17-00245, Dkt. No. 19 (Amended Schedules A/B and E/F, Summary of Assets and Liabilities and
Certain Statistical Information, Amended List of Creditors).

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1.

The Clerk of Court is DIRECTED to send Kromer a copy of this Order

and the Court’s Application to Proceed in forma pauperis with the accompanying
information sheet.
2.

Kromer is GRANTED until October 16, 2017 to (a) pay the filing fee;

or to (b) submit a completed and executed application to proceed in forma pauperis
on the form provided by the court with this Order.
3.

Failure to timely file an in forma pauperis application or to pay the

applicable filing fee by October 16, 2017 will result in AUTOMATIC DISMISSAL
of this action.
IT IS SO ORDERED.
DATED: September 19, 2017 at Honolulu, Hawai‘i.

M.P.I. Ltd. Trust et al. v. Hu et al.; CV 17-00460 DKW-KSC; ORDER DENYING
APPLICATION TO PROCEED IN FORMA PAUPERIS

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