In Re Piazza
460 B.R. 322
Bankr. S.D. Florida2011Background
- Debtor Craig Piazza moved for reconsideration of the court's June 17, 2011 order dismissing his case for cause under 11 U.S.C. § 707(a).
- Motion for reconsideration was filed within 14 days, governed by Fed. R. Bankr.P. 9023 (Rule 59(e)).
- Debtor argued the dismissal rested on manifest errors of law, inappropriate bad-faith analysis under § 707(a), and misapplication of BAPCPA provisions.
- Court previously held § 707(a) allows a non-exclusive list of ‘cause’ factors including potential bad-faith conduct under totality of circumstances.
- Debtor argued remedies under other code sections could preclude § 707(a) dismissal and that the absence of ‘bad faith’ in § 707(a) was meaningful.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether bad faith inquiry under § 707(a) is permissible | Piazza contends 707(a) lacks ‘bad faith’ language and should be limited to post-petition issues. | The court may consider non-enumerated conduct under a totality-of-the-circumstances approach for dismissal for cause. | Dismissal for cause under § 707(a) allowed; bad-faith factors may be part of totality analysis. |
| Whether § 707(a) dismissal is precluded by other more specific remedies | Other code provisions should govern debtor misconduct, precluding § 707(a) dismissal. | § 707(a) and other provisions serve distinct remedies; preclusion is not warranted. | § 707(a) dismissal not precluded by other remedies. |
| Whether negative implication from § 707(b) defeats § 707(a) bad-faith analysis | Because § 707(b) includes ‘bad faith,’ its absence in § 707(a) implies no bad-faith inquiry under § 707(a). | Differences between § 707(a) and § 707(b) show they are non-identical; absence in § 707(a) does not negate bad-faith analysis. | No negative implication; § 707(a) may consider bad-faith factors under totality-of-circumstances. |
| Whether the court properly applied totality-of-the-circumstances in the § 707(a) analysis | Factual factors cited as bad-faith can be viewed as ability-to-pay concerns not appropriate for bad-faith analysis. | Court did apply totality-of-circumstances and correctly weighed appropriate factors. | Totality-of-the-circumstances analysis supported dismissal; no manifest error. |
| Whether Piazza's alternative arguments show manifest error warranting reconsideration | Disclosed debts, family support arrangements, and attempts to restructure reflect lack of bad faith. | Arguments do not show manifest errors of law or fact; prior order properly reasoned. | Rule 9023 reconsideration denied. |
Key Cases Cited
- In re Arden Properties, Inc., 248 B.R. 164 (Bankr.D.Ariz.2000) (Rule 59(e) standard and grounds for reconsideration)
- In re Prince, 85 F.3d 314 (7th Cir.1996) (standard for reconsideration on Rule 59(e))
- In re Zick, 931 F.2d 1124 (6th Cir.1991) (non-enumerated grounds for dismissal under § 707(a))
- In re Parikh, 456 B.R. 4 (Bankr.E.D.N.Y.2011) (distinguishes § 707(a) vs. § 727: differing remedies)
- In re Kane & Kane, 406 B.R. 163 (Bankr.S.D.Fla.2009) (totality-of-circumstances approach to bad-faith analysis)
- In re Boca Village Assoc., 422 B.R. 318 (Bankr.S.D.Fla.2009) (totality-of-circumstances test for § 707(a) dismissal)
- Myers v. Toojay's Mgmt. Corp. (In re Myers), 640 F.3d 1278 (11th Cir.2011) (comparison to § 525 protections; statutory construction)
- Perlin v. Hitachi Capital Am. Corp. (In re Perlin), 497 F.3d 364 (3d Cir.2007) (negative-implication analysis; consumer vs non-consumer filings)
- Lindh v. Murphy, 521 U.S. 320 (1997) (negative implications strongest when provisions joined)
- Morales v. Trans World, Inc., 504 U.S. 374 (1992) (specific governs the general; savings vs preemption analogy)
- Matter of Reese, 91 F.3d 37 (7th Cir.1996) (Rule 59(e) cannot be used to complete presentation)