In re Jordan

598 B.R. 396

IN RE Stanley JORDAN, Sr., Debtor

CASE NO. 18-11653

United States Bankruptcy Court, E.D. Louisiana.

Signed February 26, 2019

DaShawn P. Hayes, The Hayes Law Firm, PLC, New Orleans, LA, for Debtor.

SECTION "A"

REASONS FOR DECISION

Hon. Elizabeth W. Magner, U.S. Bankruptcy JudgeOn January 18, 2019, hearing on the Motion for New Trial and/or to Reconsider Dismissal of the Case ("Motion") filed by Stanley Jordan, Sr. ("Debtor"), came before the Court. Following the hearing, the Court took the matter under advisement.

On June 27, 2018, Debtor filed for Chapter 13 bankruptcy relief. In 2002, Debtor was a codebtor in his wife's Chapter 7 bankruptcy. This case is Debtor's fifth Chapter 13 bankruptcy petition and the third filed in the past four (4) years. After a review of these cases, the Court concludes that Debtor is abusing the Bankruptcy Code's protections and dismissal with prejudice and an injunction against refiling is an appropriate remedy.

I. Background:

A. Debtor's Wife's Chapter 7 Bankruptcy

On March 12, 2002, Debtor's wife filed a Chapter 7 bankruptcy petition (Case No. 02-11673) in the United States Bankruptcy Court for the Eastern District of Louisiana ("Bankruptcy Court"). Debtor was listed as a codebtor on schedule H.¹ Her petition included property located at 6072 Warrington Drive, New Orleans, Louisiana 70122 ("Property").² Home Side Lending ("Home Side") held a lien on the Property³ which secured a claim for $ 79,498.54.⁴ On May 23, 2002, Home Side filed a Motion for Relief from the Automatic Stay. In its Motion, Home Side alleged that Debtor had not made a payment for four (4) months. The Court granted relief and Trustee abandoned the Property.⁵ The Property appears in all of Debtor's subsequent bankruptcies. On June 26, 2002, Debtor received a discharge.

B. Second Chapter Filing

Debtor filed a Chapter 13 petition in the Bankruptcy Court on February 21, 2004 (Case No. 04-11123). By 2004, servicing of the debt had been assigned to Washington Mutual.⁶ A foreclosure on the Property was pending and Debtor was $ 6,500 in arrears.⁷ Debtor initially failed to attend the § 341 meeting of creditors and on April 8, 2004, the Chapter 13 Trustee ("Trustee") filed a Motion to Dismiss.⁸ Washington Mutual also filed a Motion for Relief from the Automatic Stay in which it alleged that Debtor was three (3) months past due on postpetition payments in addition to his prepetition arrears.⁹ By agreement with Washington Mutual, the postpetition defaults were added to Debtor's prepetition arrears and paid through a modification to his plan.¹⁰ Debtor ultimately attended a rescheduled § 341 meeting and his plan was confirmed. However, payments to Washington Mutual continued to be problematic and on October 27, 2006, Washington Mutual filed an Affidavit of Default.¹¹ This time Debtor was an additional eight (8) months in arrears postpetition.¹² As a result, the stay was lifted on November 6, 2006.¹³ Since the Court granted relief from the automatic stay, Debtor's plan was completed shortly thereafter because all debt due to Washington Mutual was removed from the plan.¹⁴ Accordingly, Debtor's discharge did not include the past due amounts owed to Washington Mutual. Trustee's final report reflects that less than $ 2000.00 was paid to Washington Mutual on arrears of approximately $ 10,760.44.

C. Third Chapter Filing

On November 17, 2007, roughly one month after the conclusion of his prior case, Debtor filed for bankruptcy relief under Chapter 13 (Case No. 07-12268).¹⁵ Given that the automatic stay had been lifted in Case No. 04-11123 and all other debts had been discharged, it may be presumed that this filing was to interrupt the foreclosure by Washington Mutual yet again. In fact, Washington Mutual remained a secured creditor in the case with an outstanding debt of $ 100,000.¹⁶ Debtor's Statement of Financial Affairs also confirms that the foreclosure against the Property remained active.¹⁷ Debtor's confirmed plan proposed to pay $ 22,000 in prepetition arrears to Washington Mutual.¹⁸ This case was ultimately closed without discharge after Debtor paid $ 3,148.47 in legal and trustee fees, and $ 1,370.96 in unsecured claims but nothing on his secured debt.¹⁹

D. Fourth Chapter Filing

On May 4, 2015, Debtor filed his third Chapter 13 bankruptcy petition (Case No. 15-11099).²⁰ The case was filed pro se. It is unclear if Debtor filed to avoid foreclosure on the Property because Debtor failed to file schedules of assets and liabilities, a statement of financial affairs, a chapter 13 statement of current monthly income, the means test, certification of tax filings, a plan, and other required documentation. On June 1, 2015 the case was dismissed for failure to comply with filing requirements.²¹ No payments were made in the case, no plan was filed or confirmed and Debtor did not attend a § 341(a) meeting of creditors.

E. Fifth Chapter Filing

On June 27, 2016, Debtor filed his fourth Chapter 13 bankruptcy petition (Case No. 16-11499).²² Again, the case was filed pro se and Debtor failed to file schedules of assets and liabilities, a statement of financial affairs, a chapter 13 statement of current monthly income, the means test, certification of tax filings, other required documentation, a plan, or a certificate of credit counseling. When the Court had not received the required filings by July 15, 2016, it issued an Order to Appear and Show Cause²³ for failure to file credit counseling certificate, schedules, plan, and other required documents.²⁴ On August 15, 2016 Trustee filed a Motion to Dismiss the Case for Failure to Attend 341 Meeting, Failure to File Chapter 13 Plan, and Failure to Make Plan Payments.²⁵ On that same day, the Court held the show cause hearing and Debtor did not appear. As a result, the Court dismissed the case with prejudice and barred Debtor from filing another bankruptcy petition, under any chapter, for a period of one (1) year.²⁶

F. Sixth Chapter Filing

On June 27, 2018, Debtor filed this Chapter 13 bankruptcy case pro se .²⁷ Once again, Debtor did not file schedules of assets and liabilities, a statement of financial affairs, a chapter 13 statement of current monthly income, the means test, certification of tax filings, other required documentation, a plan, or a certificate of credit counseling. On June 28, 2018, the Court filed a Notice of Credit Counseling Certificate Deficiency ("Deficiency Notice"), explaining that the case filing was deficient because sections 521(b) and 109(h)(1) of the Code requiring Debtor partake in a credit counseling program, had not been satisfied.²⁸ The Deficiency Notice allowed Debtor fourteen days to remedy the deficiency, or the Court could dismiss the case without further notice or hearing.²⁹

On June 28, 2018, the Court issued an Order to Appear to "show cause as to why th[e] case should not be dismissed with prejudice for abuse."³⁰ On July 17, 2018, the Debtor appeared pro se and requested a continuance to retain counsel. The Court continued the matter to July 31, 2018 to give Debtor the opportunity to retain counsel.³¹ At the hearing on July 31, 2018, Debtor again appeared without counsel and the Court again continued the matter requiring the Debtor to enroll counsel by August 3, 2018 or it would dismiss the case with prejudice.³²

On August 1, 2018, Trustee filed a Motion to Dismiss Case for Failure to Attend 341 Meeting, Failure to File Chapter 13 Plan and Failure to Make Plan Payments.³³ On August 2, 2018, Debtor retained DaShawn Hayes ("Hayes") as counsel.³⁴ As a result, the Court continued the show cause hearing to August 21, 2018 to allow counsel an opportunity to file all the necessary pleadings and supporting documentation required to sustain a chapter filing.³⁵

At the August 21, 2018 show cause hearing Debtor's counsel failed to appear and none of the required pleadings and supporting documents had been filed. An Order to Show Cause was issued against Hayes,³⁶ and the original Order to Show Cause against Debtor was continued to September 25, 2018.³⁷

On September 25, 2018, a hearing on both Debtor and Hayes' Orders to Show Cause was held. The Court instructed counsel to file the necessary pleadings (schedules of assets and liabilities, statement of financial affairs, Chapter 13 Plan, and supporting documents³⁸ ) by October 2, 2018 or if he could not, then obtain assistance of other counsel to do so. Because the case had been pending for three (3) months without schedules of assets and liabilities, a statement of financial affairs, proposed plan or 341(a) meeting of creditors, the Court expressed its dissatisfaction with Debtor and Debtor's counsel.³⁹ Counsel assured the Court that he would resolve the deficiencies. The Court continued the show cause hearing to October 9, 2018.⁴⁰

On September 30, 2018, Debtor filed his schedules of assets and liabilities,⁴¹ statement of financial affairs,⁴² and his chapter 13 statement of current monthly income and calculation of commitment period for three (3) years.⁴³ Even so, the schedules were far from sufficient and on October 1, 2018, the Court issued an additional Notice of Deficiency regarding schedules E/F and G, requesting their correction within two (2) business days.⁴⁴ Seven (7) days later, on October 8, 2018, Debtor filed corrected schedule E/F and G.⁴⁵

On October 9, 2018, the Court held another hearing on the Orders to Show Cause against Debtor and Hayes as well as Trustee's Motion to Dismiss. The Court agreed to withdraw the Orders to Show Cause and deny Trustee's Motion if Debtor filed a Chapter 13 plan and certificate of credit counseling by October 12, 2018.⁴⁶

On October 10, 2018, Debtor submitted the Certificate of Credit Counseling.⁴⁷ On October 12, 2018, Debtor filed his Chapter 13 Plan ("Plan"). Debtor's Plan provided for $ 500 payments for 60 months for a total of $ 30,000.⁴⁸ The Plan was filed on an unsanctioned format in violation of Local Rule 1001-1(g)⁴⁹ and Bankruptcy Rules 9009(a) and 3015(c).⁵⁰ In...