In Re Bomarito
448 B.R. 242
Bankr. E.D. Cal.2011Background
- Debtors Marc and Felicia Bomarito filed a voluntary Chapter 7 petition on October 29, 2010.
- UST sought dismissal under § 707(b)(3)(B) based on totality of the circumstances and extension of time under Rule 1017(e)(1) was requested.
- Debtors have two mortgages and four auto loans; schedules show assets around $709,505 and unsecured claims over $159,000.
- Debtors’ means test showed negative monthly disposable income at case outset; reaffirmation agreements for four vehicles were filed January 14, 2011.
- 60-day deadline for filing a motion to dismiss or objections expired January 31, 2011; Extension Motion filed that day.
- Court denied both the Extension Motion and the Dismissal Motion as untimely and not supported by cause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether cause exists to extend the 60-day deadline for filing motions to dismiss. | UST asserts ongoing review warrants extension for cause. | Bomarito contends no adequate diligence or cause to extend. | No adequate cause; extension denied. |
| Whether the Dismissal Motion was timely filed under Rule 1017(e)(1). | UST timely filed within the deadline given extension. | Debtors argue untimely as not extending the deadline. | Dismissal Motion untimely; denied. |
| Whether the UST’s investigation was diligent and sufficient to support dismissal under totality of the circumstances. | UST needed more time to complete its totality analysis. | Investigation already concluded; no need for further inquiry. | Insufficient demonstration of diligence; extension denied. |
| Whether the Reaffirmation Agreements demonstrate abuse or justify dismissal under § 707(b)(3)(B). | Reaffirmations reveal disposable income and possible chapter 13 viability. | Reaffirmations do not alone establish abuse under totality of circumstances. | Not shown to constitute abuse under totality of the circumstances. |
Key Cases Cited
- In re Molitor, 395 B.R. 197 (Bankr. S.D. Ga. 2008) (extension of time requires reasonable diligence and cause)
- Taylor v. Freeland & Kronz, 503 U.S. 638 (U.S. 1992) (strictly construed deadlines for extensions)
- In re Desiderio, 209 B.R. 342 (Bankr. E.D. Pa. 1997) (administrative approach to extensions; diligence required)
- In re Hilmes, 438 B.R. 897 (Bankr. N.D. Tex. 2010) (abuse determination under totality of circumstances)
- In re Nowinski, 291 B.R. 302 (Bankr. S.D.N.Y. 2003) (four-factor Nowinski test for extension of time)
- In re Farhid, 171 B.R. 94 (Bankr. N.D. Cal. 1994) (extension of time should be exercised cautiously)
- In re Stonham, 317 B.R. 544 (Bankr. D. Col. 2004) ( movant must show reasonable diligence and explanation)