Riddle v. Greenberger (In re Riddle)

IN RE: RODNEY THOMAS RIDDLE, Debtor.

RODNEY THOMAS RIDDLE, Appellant, v. MARK A. GREENBERGER, Trustee; ANDREW R. VARA, United States Trustee, Region 9, Appellees.

No. 19-8022

BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT

June 29, 2020

By order of the Bankruptcy Appellate Panel, the precedential effect of this decision is limited to the case and parties pursuant to 6th Cir. BAP LBR 8024-1(b). See also 6th Cir. BAP LBR 8014-1(c).

File Name: 20b0005n.06

Appeal from the United States Bankruptcy Court for the Southern District of Ohio at Cincinnati.

No. 1:19-bk-10052—Beth A. Buchanan, Judge.

Before: CROOM, MASHBURN and WISE, Bankruptcy Appellate Panel Judges.

COUNSEL

ON BRIEF: Amy L. Good, UNITED STATES DEPARTMENT OF JUSTICE, Cincinnati, Ohio, for Federal Appellee. Rodney Thomas Riddle, Cincinnati, Ohio, pro se.

OPINION

JIMMY L. CROOM, Bankruptcy Appellate Panel Judge. The bankruptcy court dismissed the pro se debtor's chapter 7 bankruptcy case pursuant to 11 U.S.C. § 707(a) based on a finding of bad faith and also concluded that the debtor's actions demonstrated an abuse of the bankruptcy process. Accordingly, the bankruptcy court imposed a three-year bar to refiling pursuant to 11 U.S.C. §§ 105(a) and 349(a). The debtor filed this timely appeal seeking reversal.

The debtor also asks the Panel to reopen a prior bankruptcy case, case number 18-14280, so he can pay a property tax bill and reclaim certain property. The bankruptcy court dismissed that case on November 29, 2018, for failure to obtain pre-petition credit counseling as required by 11 U.S.C. § 109(h). The debtor filed motions to reconsider the dismissal on December 14, 2018, and January 3, 2019. The bankruptcy court denied both motions by orders entered December 30, 2018, and January 9, 2019. The debtor did not appeal the dismissal order or the orders denying his motions for reconsideration. As such, his request for relief from those orders is untimely and will not be addressed.

ISSUES ON APPEAL

Whether the bankruptcy court erred in (1) dismissing the debtor's bankruptcy case pursuant to 11 U.S.C. § 707(a) based on a finding of bad faith and (2) imposing a three-year bar to refiling pursuant to 11 U.S.C. §§ 105(a) and 349(a).

JURISDICTION AND STANDARD OF REVIEW

The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal. The United States District Court for the Southern District of Ohio has authorized appeals to the Panel, and no party has timely elected to have this appeal heard by the district court. 28 U.S.C. § 158(b)(6), (c)(1). A final order of the bankruptcy court may be appealed as of right pursuant to 28 U.S.C. § 158(a)(1). "Orders in bankruptcy cases qualify as 'final' when they definitively dispose of discrete disputes within the overarching bankruptcy case." Ritzen Grp., Inc. v. Jackson Masonry, LLC, 140 S. Ct. 582, 586 (2020) (citing Bullard v. Blue Hills Bank, 575 U.S. 496, 501, 135 S. Ct. 1686 (2015)). An order dismissing a bankruptcy case is the very definition of a final order. In re Ramey, 558 B.R. 160, 162 (B.A.P. 6th Cir. 2016) (citation omitted); see also Indus. Ins. Servs., Inc. v. Zick (In re Zick), 931 F.2d 1124, 1126 (6th Cir. 1991) (an order dismissing a bankruptcy case pursuant to 11 U.S.C. § 707(a) is a final order).¹ A bankruptcy court's order dismissing a case with a bar is also a final order for purposes of appeal. Cusano v. Klein (In re Cusano), 431 B.R. 726, 730 (B.A.P. 6th Cir. 2010).

"Dismissal of a bankruptcy case is reviewed for an abuse of discretion." Riverview Trenton R.R. Co. v. DSC, Ltd. (In re DSC, Ltd.), 486 F.3d 940, 944 (6th Cir. 2007) (citation omitted). The decision to bar a debtor from subsequent filings is also reviewed under the abuse of discretion standard. Cusano, 431 B.R. at 730 (citing Marshall v. McCarty (In re Marshall), 407 B.R. 359, 362 (B.A.P. 8th Cir. 2009)). "An abuse of discretion occurs only when the [trial] court relies upon clearly erroneous findings of fact or when it improperly applies the law or uses an erroneous legal standard." Kaye v. Agripool, SRL (In re Murray, Inc.), 392 B.R. 288, 296 (B.A.P. 6th Cir. 2008) (citation omitted). "An abuse of discretion is defined as a definite and firm conviction that the court below committed a clear error of judgment." Mayor of Baltimore, Md. v. West Virginia (In re Eagle-Picher Indus., Inc.), 285 F.3d 522, 529 (6th Cir. 2002) (internal punctuation and citations omitted). "The question is not how the reviewing court would have ruled, but rather whether a reasonable person could agree with the bankruptcy court's decision; if reasonable persons could differ as to the issue, then there is no abuse of discretion." Id. (citations omitted). The bankruptcy court's "decision and decision-making process need only be reasonable." Cusano, 431 B.R. at 730 (internal quotation marks and citations omitted).

A finding of fact "is clearly erroneous when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573, 105 S. Ct. 1504 (1985) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525 (1948)). "Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous." Id. at 574 (citations omitted).

FACTS

Rodney Riddle ("Debtor") is a serial bankruptcy filer in the Southern District of Ohio. Since 2011, he has filed five pro se petitions for bankruptcy relief with the court. His third case was dismissed on June 18, 2015, with a three-year bar to refiling. Upon the expiration of the bar, the Debtor filed his fourth case, a chapter 13 which was dismissed on November 29, 2018, for failing to obtain pre-petition credit counseling.

The Debtor's most recent filing is case number 19-10052. He commenced this case by filing a skeletal chapter 7 petition on January 8, 2019. On that date, Mark A. Greenberger ("Chapter 7 Trustee") was appointed as the chapter 7 trustee in the Debtor's case.

The Debtor filed his bankruptcy schedules and statements on January 22, 2019. On Schedule A/B, the Debtor listed his residence as 1140 Gideon Lane, Cincinnati, Ohio ("Gideon Lane Property"). He valued the property at $300,000.00 and indicated that the portion he owned was valued at $150,000.00. He stated that he owned the property in fee simple and that the property was community property.² He claimed 100% of the fair market value of the Gideon Lane Property as exempt on Schedule C. The Debtor indicated on his Statement of Financial Affairs ("SOFA") that Wells Fargo Bank, N.A ("Wells Fargo") had foreclosed on the Gideon Lane Property on June 30, 2018.

The Debtor also disclosed 11 parcels of investment property on Schedule A/B ("Investment Properties"). He listed the cumulative value for these properties at $275,000.00 and indicated the value of his interest was $140,000.00. The Debtor indicated that he owned the properties in fee simple and that the properties were community property.³

On his Statement of Intent, the Debtor indicated that he intended to retain the Gideon Lane Property and the Investment Properties. For the Gideon Lane Property, he checked the box "Retain the property and (explain)." He offered no explanation for how he was going to retainthe property. For the Investment Properties, the Debtor indicated he was going to redeem the properties and enter into a reaffirmation agreement for them. He also checked the box "Retain the property and (explain)." Again, he did not provide an explanation for his plan of retention.

The Debtor listed two automobiles on Schedule A/B: a 2005 Mercedes ML350 and a 2006 Mercedes E350 valued at $4,000.00 each. He also listed $1,000.00 in household goods, $1,000.00 in electronics, $100.00 in cash, $900.00 in checking accounts, and $11,000.00 in investment accounts.

The Debtor only listed one creditor on his schedules: Hamilton County, Ohio. Hamilton County was listed on Schedule D with a secured claim of $575,000.00 for unpaid property taxes on the Gideon Lane Property and the Investment Properties.⁴

The Debtor listed Dionne Y. Riddle ("Ms. Riddle") as his codebtor on Schedule H. He listed her address as the Gideon Lane Property. Subsequently in the case, the Debtor revealed that Ms. Riddle had moved to Akron, Ohio five years before.

The Debtor listed monthly income of $1,500.00 from his job as property manager for Seasons Real Estate on Schedule I. He did not list any deductions from his income for taxes, insurance, or otherwise. He did not disclose any business interests in his schedules or statements.

The Debtor listed monthly expenses of $630.00 on Schedule J. His expenses did not include any cost for housing. In response to question 24, "Do you expect an increase or decrease in your expenses within the year after you file this form," the Debtor answered "yes. Housing Expense. Presently in Foreclosure." (Sched. J, Bankr. Case No. 19-10052, ECF No. 17 at 36.)

In Part 1 of his SOFA, the Debtor stated that he was currently separated from Ms. Riddle; however, in Part 4, he indicated he had been involved in a divorce proceeding within the year prior to filing for bankruptcy relief.

On February 7, 2019, the Chapter 7 Trustee sent the Debtor a letter about several issues in the case ("Trustee Letter"). First, he instructed the Debtor to immediately advise him in writing of which debts he was seeking to discharge that were not dealt with in his prior cases. Next, he asked the Debtor to send copies of certain documents to him for review prior to the § 341 meeting of creditors ("§ 341 Meeting") scheduled for February 21, 2019. These documents included copies of federal and state tax returns, wage statements, checking account statements, investment account statements, mortgages and deeds for all properties owned by the Debtor in the prior five years, and "If you are divorced, a copy of your...