Moore v. U.S. Tr. for Region 16 (In re Moore)

583 B.R. 507

IN RE: Ivan Rene MOORE, Debtor

Ivan Rene Moore, Appellant,

v.United States Trustee for Region 16, Appellee.

Case No. CV 16–09540–AB

Bankruptcy Case No. 2:16–bk–24226–ER

United States District Court, C.D. California.

Signed January 5, 2018

Ivan Rene Moore, Los Angeles, CA, pro se.

Hatty Yip, Russell S. Clementson, Office of the United States Trustee, Los Angeles, CA, for Appellee.

ORDER AFFIRMING BANKRUPTCY COURT'S ORDER

HONORABLE ANDRÉ BIROTTE JR., UNITED STATES DISTRICT COURT JUDGE

Appellant Ivan R. Moore ("Appellant" or "Moore") appeals the Bankruptcy Court's December 13, 2016 "Order Dismissing Chapter 11 Case With 180–Day Bar To Refiling Pursuant to 11 U.S.C. § 1112(b)." Appellant filed his Opening Brief on March 31, 2017 ("Opening Br.," Dkt. No. 23.) Appellee United States Trustee for Region 16 ("Appellee" or "Trustee") filed its Response on May 3, 2017 ("Appellee Br.," Dkt. No. 31), Secured Creditor Well Fargo Bank ("Wells Fargo") filed its Response on May 5, 2017 ("Secured Creditor Br.," Dkt. No. 41), and Appellant filed his Reply brief on June 12, 2017 ("Reply," Dkt. No. 44). After considering the papers filed in connection with the appeal, the Court finds this matter appropriate for resolution without oral argument. Fed. R. Bank. P. 8019(b)(3). For the following reasons, the Court AFFIRMS the Order below.

I. BACKGROUND

Moore is a broadcaster, producer, and musician. (United States Trustee Appendix ("UST App.") at 54.) He owns multiple businesses in the music industry. (Id. at 15, 33.) Appellant filed for bankruptcy three times before this recent attempt—twice in his own name in 2002 and 2003, and once as Radio Multi–Media Investments in 2011. (Id. at 98–112.)

On October 27, 2016, Moore filed this pro se voluntary petition for chapter 11 bankruptcy in the Central District of California. (Id. at 14.) A month after Moore filed the operative chapter 11 bankruptcy petition, the Trustee moved to dismiss the Appellant's bankruptcy case or convert it to chapter 7 under 11 U.S.C. § 1112(b). (UST App. at Tab 3.) On December 13, 2016, the bankruptcy court held a hearing on Appellee's motion. (Id. at 477.) The bankruptcy court's tentative view was to convert Appellant's case to a chapter 7 bankruptcy. (Id. at 479.) At the hearing, the Trustee supported the bankruptcy court's tentative view. (Id. at 480.) However, Wells Fargo asked the bankruptcy court to dismiss the case, noting Moore's litigious history and the risk that he would interfere with the chapter 7 trustee's exercise of the trustee's fiduciary duties. (Id. at 485–87.)

This was not Moore's first encounter with Wells Fargo. In 2015, the United States District Court for the Eastern District of Wisconsin entered a $7.1 million dollar judgment against Moore and in favor of Wells Fargo. (Id. at 150.) This judgment allows Wells Fargo to replevin Moore's intangible property, personal property, royalties, profits, and other collateral. (Id. ) The judgment also allows Wells Fargo to foreclose on two properties owned by Moore's business. (Id. ) Because of this judgment, Wells Fargo is a secured creditor of Moore. Moreover, four days after filing this suit, Moore filed an adversarial proceeding against Wells Fargo and 18 other named individuals and entities. (Id. at Tab 6.) Moore's basic allegation was that Well Fargo obtained a prior judgment against him through fraud, and the other individuals and entities were depriving him of his property. (Id. at 364–69.)

The attorney for Kimberly Martin–Bragg Barbour ("Barbour"), Moore's former romantic partner, also attended the hearing. (Id. at 498.) Moore listed Barbour as a creditor, but did not inform her that he did so. (Id. ) Barbour only about Moore's bankruptcy shortly before this hearing. (Id. ) Barbour had also filed for chapter 7 bankruptcy, thus making Appellant's omission more troubling. (Id. ) At the hearing, Barbour's counsel noted that she supported the Trustee's position. (Id. )

The bankruptcy court ultimately dismissed Moore's case with a 180–day refiling bar. (Id. at 491.) In its order, the bankruptcy court noted that it had numerous concerns with Moore. Among other things: (1) Moore had failed to provide important documents required when filing for a chapter 11 bankruptcy; (2) Moore was unlikely able to confirm a plan; and (3) Moore's history of vexatious litigation. (Id. at 497.) Because Moore failed to follow basic instructions about submitting documents to the Trustee and because his filings were incomplete, the bankruptcy court concluded that chapter 11 reorganization would not be possible. (Id. ) Moreover, the bankruptcy court found that Moore acted in bad faith by not listing Barbour as a creditor, even though he filed a dischargeability action against her. (Id. ) The bankruptcy court concluded that Moore would not be able to provide any meaningful distribution to his creditors. (Id. at 499.)

II. ISSUES ON APPEAL

Appellant's Brief recites the following issues on appeal:

1. Whether the Bankruptcy Court committed an error of law or an abuse of discretion in the dismissal of this debtor's Chapter 11 for cause?

2. Whether the Bankruptcy Court committed an error of law or an abuse of discretion is disregarding Debtor's second Judgment for $4,000,000.00 plus for his plan of reorganization as stated by debtor at 314 (a) Creditor meeting?

3. Whether the Bankruptcy Court committed an error of law or an abuse of discretion in dismissing Appellant's Chapter (11) and failing to consider that the majority of the creditors did not want dismissal and supported reorganization of the estate?

4. Whether the Court erred or abused discretion in ignoring Debtor's pursuit of his fiduciary duties as debtor in possession?

5. Whether the bankruptcy Court committed an error of law or an abuse of discretion when the Court's Order uses another unrelated case information to support the dismissal?

6. Whether the Bankruptcy Court committed an error of law or an abuse of discretion in dismissing the debtor's Chapter 11 because the Court erroneously state that the debtor was "serial bankruptcy filer," using another party's bankruptcy to support this statement?

7. Whether the Bankruptcy Court committed an error of law or an abuse of discretion in dismissing the debtor's Chapter 11 bankruptcy for bad faith failure to list a party as a creditor on schedules, when that party failed to meet the definition of a creditor under 11 U.S. code section 101(10) ?

8. Whether the Bankruptcy Court committed an error of law or an abuse of discretion in dismissing the debtor's Chapter 11 bankruptcy because he was erroneously declared vexatious in the State Court and that issue is pending on appeal before the California Court of Appeals?

9. Whether the Bankruptcy Court committed an error of law or an abuse of discretion in dismissing the debtor's Chapter 11 bankruptcy deeming his adversarial complaint outlandish when in fact there are documentary evidence that supports the allegations plead in the complaint, and fail to permit any amendment of the complaint?

10. Whether the Bankruptcy Court committed an error of law or an abuse of discretion in dismissing the debtor's Chapter 11 bankruptcy for failure to permit Appellant one opportunity to remedy any of the purported deficiencies in the US Trustee's Chapter 11 Notices and Guides?

11. Whether the Bankruptcy Court committed an error of law or an abuse of discretion in dismissing the debtor's Chapter 11 bankruptcy in violation of debtor's due process and equal protection rights by depriving Debtor one opportunity to amend.

12. Whether the Bankruptcy Court committed an error of law or an abuse of discretion in dismissing the debtor's Chapter 11 bankruptcy in violation of debtor's due process and equal protection rights by giving no consideration to Debtor's evidence and relying on hearsay statements from third parties.

13. Whether the Bankruptcy Court committed an error of law or an abuse of discretion in disregarding the income from the debtor's night club in Milwaukee WI. which also generated in excess of $170,000.00 (One Hundred and Seventy Five Thousand dollars) per month.

Opening Br. pp. 2–5.

Eleven of the thirteen issues can be distilled to this: whether the bankruptcy court abused its discretion in dismissing Moore's chapter 11 bankruptcy case and barring him from refiling for 180 days. The last two issues are whether the bankruptcy court violated Moore's due process and equal protection rights.

III. STANDARDS OF REVIEW

The bankruptcy court's decision to dismiss a case is reviewed under an abuse of discretion standard. Leavitt v. Soto (In re Leavitt) , 171 F.3d 1219, 1223 (9th Cir. 1999). A two-part test determines whether the bankruptcy court abused its discretion. United States v. Hinkson , 585 F.3d 1247, 1261–62 (9th Cir. 2009) (en banc). First, the appellate court considers de novo whether the bankruptcy court applied the correct legal standard. Id. Then the appellate court reviews the bankruptcy court's fact findings for clear error. Id. at 1262 & n.20. See also Eisen v. Curry (In re Eisen) , 14 F.3d 469, 470 (9th Cir. 1994) (the bankruptcy court's finding of "bad faith" is reviewed for clear error).

An appellate court must affirm a bankruptcy court's fact findings unless they are illogical, implausible, or without support in the record, i.e. clearly erroneous. Hinkson , 585 F.3d at 1262. A factual determination is clearly erroneous if it lacks adequate evidentiary support or was induced by an erroneous view of the law. Wall St. Plaza, LLC v. JSJF Corp. (In re JSJF Corp.) , 344 B.R. 94, 99 (9th Cir. BAP 2006).

Whether the bankruptcy court's procedures comport with due process is reviewed de novo. Price v. Lehtinen (In re Lehtinen) , 564 F.3d 1052, 1058 (9th Cir. 2009), abrogated on other grounds by Gugliuzza v. Fed. Trade Comm'n (In re Gugliuzza) , 852 F.3d 884 (9th Cir. 2017).

IV. DISCUSSION

A. Dismissal Was Appropriate

1. The Court Applied the Correct Legal Standard.

The Court plainly applied the correct legal...