611 F. App'x 356
7th Cir.2015Background
- Dennis Ball defaulted on a 2000 mortgage (Franklin Williamson Properties) and a 2007 line of credit (Credit Union West).
- Ball filed multiple bankruptcy petitions in 2012–2013; several were dismissed. Three dismissals occurred within a year before the August 2013 filing (case no. 13-40863).
- In case no. 13-40016 a bankruptcy judge denied Ball’s motion to set aside an annulment of the automatic stay, finding Ball did not appear at the hearing and suspecting a scheme to delay creditors.
- In case no. 13-40863 the bankruptcy judge ruled the automatic stay did not take effect under 11 U.S.C. § 362(c)(4)(A)(i) because Ball had filed multiple dismissed cases in the prior year and he failed to rebut the presumption the filing was not in good faith.
- The district court consolidated Ball’s appeals, affirmed both bankruptcy-court rulings, and found Ball offered no evidence to overcome the bankruptcy judges’ findings.
- The district court granted Credit Union West’s motion for sanctions and directed submission of fees and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the automatic stay applies when debtor filed multiple dismissed cases in prior year | Ball argued stay should apply to halt collections | Credit Union West argued § 362(c)(4)(A)(i) prevents stay because of multiple dismissed filings | Court held no stay: Ball’s three dismissed filings in the year disqualify him from stay relief |
| Whether the stay should be annulled in case no. 13-40016 | Ball disputed annulment | Franklin Williamson argued Ball filed to delay foreclosure and failed to appear or produce evidence of good faith | Court held annulment appropriate; record showed scheme to delay and frivolous conduct |
| Whether Ball rebutted presumption of bad faith under § 362(d)(4) | Ball offered no admissible evidence of good faith | Creditors argued presumption unrebutted and filings were part of delay scheme | Court held Ball failed to rebut presumption; filings deemed not in good faith |
| Whether sanctions against Ball are warranted | Ball did not meaningfully oppose sanctions | Credit Union West sought fees and costs for frivolous filings | Court granted sanctions and ordered submission of fee statement |
Key Cases Cited
- Aiello v. Providian Fin. Corp., 239 F.3d 876 (7th Cir. 2001) (automatic stay annulation principles)
- In re Curry, 362 B.R. 394 (Bankr. N.D. Ill.) (applying § 362(c)(4)(A)(i) to deny stay after multiple dismissed filings)
- In re Barner, 597 F.3d 651 (5th Cir.) (construing filings made in a scheme to delay as basis to deny stay)
- In re Spencer, 531 B.R. 208 (Bankr. W.D. Wis.) (addressing good-faith presumption and scheming to hinder creditors)