In re Beavers

643 B.R. 410

IN RE: Lynette Marie BEAVERS, Debtor(s).

C/A No. 22-00646-eg

United States Bankruptcy Court, D. South Carolina.

Signed August 24, 2022

Janet B. Haigler, Chapter 7 Panel Trustee, Chapin, SC, for Trustee, Pro Se.

ORDER

Elisabetta G. M. Gasparini, U.S. Bankruptcy Judge

THIS MATTER came before the Court for hearing on August 23, 2022, to consider the Debtor's Motion to Reinstate Case with Stay and to Vacate Court's July 25, 2022, Dismissal of Bankruptcy filed on August 5, 2022 (the "Motion").¹ No objections to the Motion were filed, and the Debtor was the only party present at the hearing. After consideration of the record and the arguments made at the hearing, the Court grants the Motion to the extent of vacating the dismissal of the case, but further orders that the case be immediately closed as there are no further assets to administer at this time.

PROCEDURAL BACKGROUND

On March 10, 2022, the Debtor filed for relief under Chapter 7 of the Bankruptcy Code, pro se . In the Voluntary Petition, at Part 2, Question 9, the Debtor indicated that she had previously filed for bankruptcy within the last eight years in the Northern District of Georgia, and at Question 11, she indicated that she rents her residence and that her landlord had not obtained an eviction judgment against her.² Janet B. Haigler was appointed as the chapter 7 trustee in the case (the "Chapter 7 Trustee").

The Debtor's schedules list assets with an aggregate value of $10,059,790.00 and liabilities of $152,530.28.³ Among other things, in Schedule A/B, Part 4, Question 33, which requires a debtor to list claims against third parties, the Debtor listed a claim of $5,000,000.00 against her estranged husband, Jack V. Beavers, for "division of [marital] estate," and at Part 5, Question 43, which requires a listing of "customer lists, mailing lists, or other compilations," the Debtor listed "Civil Rights Lawsuit Records & Archive Compilations by Anthony Reed" with a value of $5,000,000.00. The Statement of Financial Affairs at Part 4, Question 9, which requires the Debtor to list any lawsuits or proceedings that she is or was involved in within one year prior to her bankruptcy filing, did not list any actions or proceedings.⁴

As an addendum to her schedules, the Debtor included an explanation concerning her assets, indicating, in pertinent part:

As a married couple, Jack Vinson Beavers and I own no significant marital property except for contingent and unliquidated civil rights claims against the Sheriff of and for Paulding County, the Department of Child & Family Services, and the State of Georgia, including but not limited to claims arising from false arrest, malicious prosecution and denial of child custody; the parties acquired personal property by rental and lease through the income and credit of Defendant Jack V. Beavers, which Jack V. Beavers should be ordered to pay and maintain for the benefit of his children. The parties have not agreed as to how the marital property shall be divided.

However, I also, as an individual, have valuable claims against a number of my estranged husband Jack Vinson Beavers and his brother-in-law Anthony Reed.

...

Since I (apparently) cannot file for divorce or even "maintenance and support" under the laws of North or South Carolina before a year of separation, I wish to file such claims in Federal Court as arising under 28 U.S.C. § 1334. My estranged husband's default in his marital obligations are the SOLE reason for me to file bankruptcy at this time. I know I will not be entitled to a discharge without a special dispensation from the Court, but it is to collect what I am entitled to from Jack Vinson Beavers that is my main goal in this bankruptcy.

Jack Vinson Beavers owes me and my daughters (and my grandson) support and I will ask the Chapter 7 Bankruptcy Trustee either to file suit to enforce these obligations here either in U.S. Bankruptcy or U.S. District Court or abandon those claims to me to file personally in one of those courts.... In addition to damages arising from breach of our Marital Contract, Jack Beavers owes me for multiple instances of tortious conduct....⁵

On March 10, 2022, the Debtor filed an Application to Pay the Filing Fee in Installments, and on March 23, 2022, the Court entered an order granting the application and ordering the filing fee to be remitted in four payments.⁶ On May 10, 2022, due to the Debtor's failure to pay the installments due, the Court entered an order requiring the Debtor to appear before the Court on June 13, 2022 to show cause why the case should not be dismissed.⁷ Following the hearing, the Court entered an order requiring the Debtor to pay the remaining filing fee installments of $163.00 and the $32.00 fee for filing schedules adding creditors that were not listed at the time the petition was filed by July 1, 2022, and providing that failure to do so would result in the dismissal of the case without further notice or hearing.⁸

On March 11, 2022, the Court entered a notice on the docket that because the Debtor had previously received a chapter 7 discharge within the eight-year period preceding the filing of the current case in Case No. 19-40368 in the U.S. Bankruptcy Court for the Northern District of Georgia, the Debtor was not entitled to receive a discharge in this case.

On April 22, 2022, the Chapter 7 Trustee held the meeting of creditors pursuant to 11 U.S.C. § 341. On May 4, 2022, the Chapter 7 Trustee entered an Entry of Further Action Required indicating she would hold the case open for 30 days to allow the Debtor to file the Statement of Financial Affairs which was past due, and to provide her with copies of the bank statements she had requested. Following a diligent inquiry into the financial affairs of the Debtor and the property belonging to the estate, on May 13, 2022, the Chapter 7 Trustee filed the Chapter 7 Trustee's Report of No Distribution concluding, among other things: "there is no property available for distribution from the estate over and above that exempted by law."⁹ The Report of No Distribution further noted: "Pursuant to Fed. R. Bankr. P. 5009, I hereby certify that the estate of the above-named debtor(s) has been fully administered. I request that I be discharged from any further duties as trustee."

Due to the Debtor's failure to pay the $195.00 in outstanding fees as had been ordered, on July 25, 2022, the Court entered an order dismissing the case (the "Dismissal Order").¹⁰ On August 5, 2022, the Debtor filed the Motion, seeking to vacate the Dismissal Order, reinstate her bankruptcy case, and reimpose the automatic stay. The Motion admits that the Debtor "goofed" in managing her funds but promised to become current on the outstanding payments. In support for the relief sought, the Debtor explained her need to "restore the automatic stay in order to preserve my equitable rights to pursue core and noncore claims outlined on my schedule [sic] Schedule B and supplements" and argued that the reinstatement of the automatic stay was necessary to preserve her residence as well as "keep[ ] or retak[e] certain marital property and recover funds owed to me for the benefit of my creditors and the estate, which in turn is basically the only way I can keep myself and my children and infant grandchildren off the streets." On August 12, 2022, the Debtor remitted all outstanding payments due to the Court.

The Court held a hearing on August 23, 2022, at which only the Debtor appeared. The Debtor explained that her husband of 18 years, the sole income provider, had abandoned the family, leaving her and the children with no money to support themselves. The Debtor stated that the main reason for filing bankruptcy was for the automatic stay to go into effect to stop any eviction proceedings by her landlord. She further indicated that the only legal action in which she is currently involved is a divorce proceeding that her estranged husband filed in Georgia.

DISCUSSION AND CONCLUSIONS

This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334 and 157. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) and this Court may enter a final order.

While the Motion does not cite any case law or statutory authority, it appears that the Debtor is seeking the Court's reconsideration of the Dismissal Order after curing the outstanding fee payments due to the Court. The Court, therefore, will apply the standards of Federal Rules of Civil Procedure 60(b), applicable to bankruptcy cases pursuant to Federal Rule of Bankruptcy Procedure 9024.¹¹ Pursuant to Rule 60(b), the Court may relieve a party from an order because, among other reasons, the "judgment has been satisfied, released, or discharged" or for "any other reason that justifies relief." Fed. R. Civ. P. 60(b)(5), (6). While the Debtor accepts sole responsibility for her failure to timely remit the fees due to the Court, she explained in the Motion and at the hearing that she has undergone various hardships including her estranged husband's abandonment of the family and failure to provide her or the children with financial support, and her inability to obtain public assistance. Eighteen days after the case was dismissed, the Debtor remitted the $195.00 due. The Court acknowledges that the Debtor had several opportunities to make the payments and failed to timely remit them, thus warranting the dismissal. Given the specific facts of this case, the arguments the Debtor made in Court, and that the primary ground for the Dismissal Order has been satisfied by the payment of the fees, the Court will set aside the Dismissal Order.

The Court, however, notes that the relief granted may not provide the full protection that the Debtor appears to seek in the Motion. Setting aside the Dismissal Order will not change the fact that the case has been fully administered and is ripe to be closed.

In a chapter 7 case, upon the filing of a petition, all pre-petition property and interests become...