Taal v. St. Mary's Bank et al
Filing
45
///MEMORANDUM AND OPINION affirming the Bankruptcy Courts dismissal of Taals Chapter 13 petition. So Ordered by Judge Paul J. Barbadoro.(vln)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Baboucar B. Taal
v.
Civil No. 13-cv-194-PB
Opinion No. 2014 DNH 003
St. Mary’s Bank, et al.
MEMORANDUM AND ORDER
Baboucar Taal seeks appellate review of the bankruptcy
court’s dismissal of his Chapter 13 bankruptcy petition.
St.
Mary’s Bank, Discover Bank, and the law firm of Niederman,
Stanzel & Lindsey oppose Taal’s petition.
I affirm the
Bankruptcy Court’s dismissal order.
I.
BACKGROUND
In 2009, St. Mary’s and Discover independently sued Taal in
New Hampshire district courts.
St. Mary’s received a judgment
of $6,196.62 and Discover received a judgment of $10,454.71.
Taal unsuccessfully appealed both judgments to the New Hampshire
Supreme Court.
Although both judgments are final, St. Mary’s
remains involved in state court litigation concerning the
propriety of its disposal of collateral Taal surrendered to
satisfy the loan.
Taal has been held in contempt by state courts for failing
to comply with prior orders to pay the judgments.
Rather than
making required payments, Taal filed a Chapter 13 bankruptcy
petition.
Taal actively participated in his Chapter 13 proceedings,
filing countless motions on his own behalf.
Taal’s activity,
however, was not necessarily aimed at a prompt resolution of his
proceedings.
From the beginning, Taal had difficulties
complying with bankruptcy court rules.
On September 24, 2012,
the bankruptcy court issued a contingent notice of dismissal
that was subsequently waived after Taal paid a delinquent filing
fee.
Taal then failed to disclose his tax records to St. Mary’s
upon its request, as required by the bankruptcy code.
U.S.C. § 521(e)(1).
See 11
In late September and early October, St.
Mary’s filed affidavits of noncompliance and a proposed order of
dismissal for Taal’s failure to turn over these documents.
On
October 4, 2012, after a hearing, the court directed Taal to
provide the documents to St. Mary’s, noting that failure to
comply with its order could result in dismissal of his case.
The next day, the court granted a motion to continue the
confirmation hearing until November 16, presumably after Taal
2
was to have given St. Mary’s the appropriate documents.
Over
the next month, Taal continued to file motions to, among other
things, avoid
a lien and initiate an adversary proceeding
against St. Mary’s, both of which were denied by the court.
On November 16, 2012, the court held the hearing to discuss
the potential confirmation of Taal’s Chapter 13 Plan.
St.
Mary’s had objected to confirmation on the grounds that the plan
failed to meet required statutory parameters.
That day, the
court issued the following order:
Trustee to submit a proposed order forthwith regarding
payments.
Confirmation is denied.
On or before
January 18, 2013 the debtor(s) must file with the
Court an amended plan, serve a copy of the amended
plan and a notice of confirmation hearing as required
by Federal Rules of Bankruptcy Procedure 2002(b) and
3015(d) and LBR 3015-(b), and file a certificate of
service with the Court, failing which the case may be
dismissed.
If an amended plan is timely filed and
served, a confirmation hearing will be held on March
8, 2013 at 9:00 a.m.
Doc. No. 3-13.
Taal subsequently filed, among other things, a
motion for contempt on November 27, 2012, a motion for sanctions
on December 17, 2012, and a further motion for sanctions on
December 26, 2012, alleging that St. Mary’s attorney had failed
to file a required corporate disclosure document.
On December
28, 2012, Taal filed a required bankruptcy form detailing his
3
current income.
On January 2, 2013, he filed an objection to
the creditors’ proofs of claim, a motion requesting production
of documents that was subsequently denied, and a further motion
for sanctions.
requests.
The next day, Taal filed several subpoena
On January 7, he filed amendments to the required
current income forms, and on January 14 he filed objections to
the creditors’ motion to quash the subpoena requests.
On
January 17, 2013, Taal filed a motion to amend the court’s order
denying his request for document production.
Taal did not,
however, file an amended confirmation plan by January 18, as
required by the court’s November 16 order.
On January 25, 2013, the court dismissed Taal’s bankruptcy
case, quoting its November 16 order directing Taal to file an
amended confirmation plan by January 18, 2013, “failing which
the case may be dismissed.”
The dismissal order then stated:
“As of the date of this order, the Debtor has failed to file an
amended plan and certificate of service with the Court in
compliance with the Order.
Accordingly, the case is hereby
dismissed for want of prosecution.”
omitted).
Doc. No. 5-1 (emphasis
Four days later, Taal submitted a motion to amend the
dismissal order, claiming that he never received notice of the
4
November 16, 2012
order, and requesting leave until February
25, 2013 to submit an amended confirmation plan.
On February 5,
2013, the court responded that a Certificate of Notice indicated
that a copy of the November 16 order had been mailed to Taal’s
address and that Taal had received other documents mailed to the
same address throughout the proceedings.
The court also noted
that, at the November 16 hearing, it had orally directed Taal to
file his amended plan by January 18, 2013 or risk dismissal, and
had explained that it would issue an order that day summarizing
the hearing’s outcome.
On February 12, 2013, Taal filed another motion to amend,
arguing that the court unfairly dismissed his case based on a
single failure to file “while excusing other parties time and
time again.”
Taal filed a similar motion on March 12 that the
court denied two days later, noting that “[t]he Debtor’s
arguments . . . do not evince any exceptional circumstance –
only that the Debtor feels the Court homed in on a minor
procedural flaw and unfairly dismissed the bankruptcy case
because of it.”
Doc. No. 5-8.
On April 24, 2013, Taal filed a
notice of appeal with this court.
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II.
STANDARD OF REVIEW
This court has jurisdiction to hear appeals from final
judgments, orders, and decrees issued in bankruptcy court
pursuant to 28 U.S.C. § 158(a)(1).
When reviewing a decision by
a bankruptcy court, the district court reviews legal conclusions
de novo and upholds findings of fact unless they are clearly
erroneous.
Fed. R. Bankr. P. 8013; Palmacci v. Umpierrez, 121
F.3d 781, 785 (1st. Cir. 1997); Askenaizer v. Moate, 406 B.R.
444, 447 (D.N.H. 2009).
In discretionary matters, a bankruptcy
court abuses its discretion if it “ignores a material factor
deserving of significant weight, relies upon an improper factor
or makes a serious mistake in weighing proper factors.”
Howard
v. Lexington Invs., Inc., 284 F.3d 320, 323 (1st Cir. 2002)
(internal quotation marks omitted).
III. ANALYSIS
To the extent that they are intelligible, Taal’s arguments
center upon the bankruptcy court’s alleged procedural unfairness
and abuse of discretion in dismissing his petition.
Among other
things, Taal argues that: (1) the court “abused . . . judicial
and legal obligation[s] to arbitrate on the facts” when it
6
dismissed his case on procedural grounds; (2) he was denied due
process because he lacked notice of the court’s November 16
order; and (3) his income schedules, Doc. No. 4-2, are the
equivalent of a confirmation plan and thus fulfill the
requirements of the November 16 order.
I must consider whether the bankruptcy court abused its
discretion in dismissing Taal’s petition for failing to timely
file a Chapter 13 plan.
A bankruptcy court’s dismissal for
failure to file a confirmation plan is discretionary, and if
“the bankruptcy court’s conclusion[s] supporting dismissal are
supported by the facts there is no abusive discretion.”
In re
Burgos, 476 B.R. 107, 111 (S.D.N.Y. 2012) (citing In re Dudley,
273 B.R. 197, 199 (8th Cir. BAP 2002)); see also Howard, 284
F.3d at 323 (holding that it is “entirely appropriate” for a
bankruptcy court to set and enforce a deadline for a debtor to
file tax returns).
A bankruptcy court “may issue any order,
process, or judgment” that it deems necessary, and can “sua
sponte, tak[e] any action or mak[e] 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
bankruptcy code also grants the court the power to dismiss a
7
Chapter 13 case for cause, which includes the “failure to file a
plan timely.”
Id. § 1307(c)(3).
The Ninth Circuit Bankruptcy
Appellate Panel characterizes § 1307(c)(3) as “an important
restriction on a chapter 13 debtor who, unlike a chapter 11
debtor, is the only entity that may file a plan.”
In re
Ellsworth, 455 B.R. 904, 916 (9th Cir. BAP 2011) (citing 8
Collier on Bankruptcy ¶ 1321.01 (Alan N. Resnick & Henry J.
Sommer, eds., 16th ed. 2011)).
A party may seek modification or
clarification of an order, but a litigant flouts a court’s
specific order at its peril.
Id.
The First Circuit has noted
that Chapter 13 allows a debtor many benefits over other
bankruptcy proceedings, but “[t]o obtain these benefits, Chapter
13 debtors are required to act swiftly.
They must file a plan
within 15 days of the petition, and must commence payments under
the plan within 30 days.
Failure to act in a timely manner is
grounds for dismissal.”
Howard, 284 F.3d at 321 n.1 (citations
omitted).
Here, the bankruptcy court appropriately set and enforced a
deadline for timely filing an amended plan.
Although Taal was
active in litigation, he was lax in responding to creditors and
to the court’s directives to file his tax returns.
8
He was given
explicit instructions – both in a court order and during the
hearing preceding the order – that a failure to timely file a
plan would lead to his case’s dismissal.
such warning.
This was not his first
Taal did not file the plan, and the bankruptcy
court properly exercised its discretion under 11 U.S.C. §
1307(c)(3) to dismiss the case.
Taal’s arguments otherwise are unavailing.1
Taal clearly
had notice of the order and the potential consequences of
violating it, whether by certified mail or by attending the
November 16 hearing.
His income and expenditure forms are also
manifestly not a confirmation plan or the equivalent thereof.
Pursuant to 11 U.S.C. § 1322, a plan shall provide for, among
other things, the submission of future earnings to the
supervision and control of the trustee.
1
Taal’s income and
To the extent that it is intelligible, Taal also appears to
allege an equal protection violation based upon the bankruptcy
court forgiving creditors’ minor procedural faults but
dismissing his case for a similarly minor fault. This argument,
among other flaws, as alleged would not permit a “reasonable
inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). An
equal protection claim must include facts “sufficient to convey
specific instances of unlawful discrimination,” and “[a]
plaintiff may not prevail simply by asserting an inequity and
tacking on the self-serving conclusion that the defendant was
motivated by a discriminatory animus.” Coyne v. City of
Somerville, 972 F.2d 440, 444 (1st Cir. 1992)(quotations
omitted).
9
expenditure forms were required federal bankruptcy filings that
contain some information that might overlap with a potential
plan, but lack any information on plan payments.
Further, Local
Bankruptcy Rules specify a form that must be used by Chapter 13
petitioners.
initial plan.
LBR 3015-1.
Taal used this form in submitting his
Doc. No. 2-10.
The November 16, 2012 order noted
that Taal’s amended plan must also conform to Local Rule 3015.
Considering Taal’s prior compliance with the local rules
regarding plan submissions, his assertion that the income and
expenditure forms constitute a plan, or substantial compliance
with a plan, amounts to nothing more than a flimsy, post hoc
rationalization for his failure to abide by court rules.
In addition to his central argument, Taal alleges various
bankruptcy court failures and creditor malfeasance.
As
discussed above, this case centers upon the propriety of the
bankruptcy court’s dismissal of Taal’s claim for failing to
timely file an amended Chapter 13 plan.
I need not address the
merits of Taal’s charges because each of his complaints has no
bearing on the ultimate disposition of the case.
10
Finally, Taal claims that an appeals court “always favors
cases disposition of the merits [sic].”
Taal overstates a
fundamental policy of the law – a policy necessarily balanced by
the courts’ need to prevent undue delays.
See Richman v. Gen’l
Motors Corp., 437 F.2d 196, 199 (1st Cir. 1999).
Courts must
have the ability to “establish orderly processes and manage
their own affairs,” and “disobedience of court orders is
inimical to the orderly administration of justice and, in and of
itself, can constitute extreme misconduct.”
330 F.3d 76, 81 (1st Cir. 2003).
Young v. Gordon,
Here, the court properly
exercised this discretionary balancing in dismissing Taal’s
petition without prejudice.
IV.
CONCLUSION
For the foregoing reasons, I affirm the Bankruptcy Court’s
dismissal of Taal’s Chapter 13 petition.
SO ORDERED.
/s/Paul Barbadoro
Paul Barbadoro
United States District Judge
cc:
Counsel of Record
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